One of the reasons why corporate profits are bouncing back
so quickly is that companies have done some serious payroll
trimming during the downturn.
Cynics can argue that corporations could have done this
sooner. Many of the companies doling out pink slips haven't
necessarily been slapped with slowdowns in productivity, even
if workforce morale issues are harder to gauge.
Following the logic that layoffs come in response to
companies hunkering down for an economic lull, shouldn't we
be in a hiring boom if the recession is roadkill in the
rearview mirror?
It certainly doesn't appear that way going by some of the
staff-slashing moves this week.
RealNetworks (Nasdaq: RNWK) is laying off
4% of its workforce today, according to Kara Swisher's
BoomTown column.
Microsoft (Nasdaq: MSFT) turned heads by
announcing its first wave of layoffs in company history
back in January. It dismissed 800 hires this week. Even if
this is part of the original 5,000 jobs targeted for
elimination back in January, an improving economy, the
success of Bing, and the release of Windows 7 haven't been
enough to sway Mr. Softy.
Johnson & Johnson (NYSE: JNJ) will be
saving as much as $900 million  next year,
primarily by letting more than 7,000 employees go. No more
tears?
Time Warner (NYSE: TWX) is restructuring
its struggling magazine publishing subsidiary with 280
casualties in the way.
Sprint Nextel (NYSE: S) is cutting dozens
of jobs in its wholesale business.
So what's the deal, Corporate America? Is this just the
recession's final gasp or are some of these companies
expecting a double-dip recession?
It's important to point out that some companies are going
the other way.
Google (Nasdaq: GOOG) is in hiring mode
again. And some of the jobs being slashed -- Sprint Nextel's
languishing landline business and Time Inc.'s magazines --
are in industries that aren't expected to grow, regardless of
the economic turnaround.
However, there comes a point where enough is enough.
Companies that are fine tuning their payrolls today probably
could have -- and should have -- done this a year ago when
folks were bracing for the worst.
I guess it'll mean more paranoia in the workforce, but
with chunkier-than-expected bottom lines.
This article was originally published as
You Call This a Recovery?on
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