| I woke up this morning to some unsettling news. | | | | slowdown's taking its toll. |
| Dow Chemical (DOW) is shutting 20 plants and | | | | So let me ask you a question... Is it a good thing? |
| asking 11% of its workforce to leave. On top of | | | | Could all of these layoffs be good for the |
| that, they're cutting another 6,000 contractors | | | | economy? First let me say, losing a job is never a |
| from payroll. Last week DuPont (DD), another | | | | good thing. Having it happen a few weeks before |
| chemical manufacturer, dismissed 2,500 | | | | Christmas is horrible, and devastating. My heart |
| employees. | | | | goes out to the hundreds of thousands of people |
| 3M (MMM) is also announcing layoffs this morning... | | | | in this very situation. |
| 1,800 jobs. | | | | However, I do believe sometimes it's necessary |
| Between Dow and 3M and a number of other | | | | to let employees go... especially if the health of |
| companies, almost 20,000 people have lost their | | | | the overall business is in jeopardy. I think of it like |
| jobs in the last few days. And that doesn't count | | | | pruning a tree. You cut back all of the dead wood |
| the autoworkers at the Big 3. They'll no doubt see | | | | to help the rest of the plant thrive in the spring. |
| some layoffs as well. | | | | Big layoffs can also help the overall economy. |
| This news made my stomach turn. | | | | Short term, layoffs hurt. People who lose their |
| I remember sitting in my office a few years | | | | jobs stop spending. And those who survive the |
| back. I was watching co-workers lose their jobs. I | | | | job cuts slow spending way down... fearful that |
| can still vividly recall the fear and sadness on their | | | | they might be next. Any slowdown in consumer |
| faces. | | | | spending is painful. But it can lead to a brighter |
| Several firms I worked with went through | | | | future. |
| workforce reductions. One, right after the | | | | The impact to business is a bit different. |
| dot-com blowup, was particularly devastating. | | | | By cutting back on a bloated workforce, business |
| Almost half the office was let go. | | | | is often able to grow. They're able to ensure job |
| The job picture's looking bleak once again. | | | | stability to the remaining employees. Pay those |
| US non-farm payrolls for the month of November | | | | who remain behind better. And, best of all, |
| were announced Friday. The news wasn't good. | | | | profitability and the return stockholders receive |
| More than half a million people lost jobs. For those | | | | should go up. Overall, with fewer employees |
| of you quick on the math, it's more than 17,000 | | | | overhead costs are reduced. |
| jobs a day. | | | | But, here's a word of caution. |
| In Chicago, workers are taking matters into their | | | | When a company does cut back on employees, |
| own hands. | | | | that's not the time to jump in and buy a stock. I |
| 250 workers at the Republic Windows & | | | | wouldn't rush out and try to buy up shares of 3M, |
| Doors plant received word last week they'd be | | | | DuPont, or even Dow. Sometimes the first round |
| losing their jobs. Unfortunately, they were only | | | | of layoffs can be followed by others. You never |
| given 3 days notice. In a scene straight out of the | | | | know how layoffs will impact a business. |
| 1930s the unionized employees staged a | | | | I like to wait and watch for signs of life. |
| takeover. | | | | I'll monitor the business and results. Look for signs |
| They won't vacate the plant until guarantees of | | | | the layoffs are productive. Look for improving |
| severance and vacation pay are given. | | | | business growth, bigger better margins, and most |
| Business has fallen off not only at the Republic | | | | of all profits. Remember... if a company doesn't |
| Windows & Doors plant but at other | | | | have profits, soon they won't have any |
| businesses around the nation. The economic | | | | employees. |