It is very likely that the unemployment rate, which dropped to 5.6 percent today, will rise in 2015. We heard today that both Macy’s and J.C. Penney will be closing stores this year. Many other major corporations are considering downsizing or eliminating service and goods in areas which are not profitable. There are multiple reasons for their decisions; some have credence, but some appear to be decisions regarding profits of the CEO’s and Board of Directors. Is this oversaturation or simply corporate greed?
It was predictable that retail stores across the United States would be closing their doors. Online purchases are on the rise. The need to ‘shop’ for anything can be done more quickly and more efficiently on the internet for many commodities.
Consumable items are seldom included in the changes of our nation’s purchasing pattern.
Thursday the soft drink giant Coca Cola announced changes in the way they will operate in 2015. Management will eliminate 1,600 to 1,800 jobs around the world. Upper management will be rewarded by saving nearly three billion dollars.
In all fairness to Coca Cola, it has made attempts to adapt to a changing market. Although the results are questionable given recent studies of obesity in our nation, consumers claim attention towards more health conscious products. The soft drink giant attempted to market a product called ‘Coca Cola Life,’ which was low in calories and contained less sugar.
The company failed at virtually 100 percent of their marketing campaigns. The fiscal quarter which ended in September revealed that profits were reduced by 14 percent. Coca Cola reported a mere profit of 2.1 billion dollars for the quarter. That’s right, billions.
Coca Cola never considered reducing the price of its biggest sellers. Instead they reduced the size of their cans and bottles and raised the prices. Once again a major corporation demonstrates that greed is more important than the employees who labor for the profits of upper level executives and shareholders.
A few of the major corporations which are considering the elimination of jobs, a form of restructuring, or the entire eradication of some operations are; General Electric, Microsoft, Nordstrom, Hewlett-Packard, Kellogg, Best Buy, Wal-Mart, Ford Motor Company, and General Motors. These are only a few of those considering changes to maintain bloated profits.
Working America; those who are paid hourly wages and find it difficult to save money, or who live in fear of a medical crisis which would cost them security and eliminate their present way of life, have many misconceptions about big business.
Americans who work for profitable companies feel that their jobs are secure. That assumption is far from the truth. Major corporations care little about humanity; profits are their only priority. If reducing the workforce is a viable option to increase profitability, they are quick to eliminate jobs.
At the opposite end are small businesses. The expense to train qualified employees makes them less likely to reduce their workforce.
It appears logical that downsizing the number of employees will increase profits. Again, untrue. Historically companies which have reduced their workforce numbers have seen little or no increase in profitability.
Companies frequently claim that downsizing simply removes unnecessary labor, and secures jobs for those who remain. This is a complete fallacy. Remaining employees experience a decrease in morale, and an increased workload with no monetary compensation.
Numerable other facts prove that business practices actually result in less production, and an erosion of quality.
America was at its peak in the 1990’s until NAFTA removed many of our better paying jobs.
In the 21st century corporate profits and the profits of shareholders trump concern for the workers who are responsible for the company’s success.
Reliance of Corporations center on MBA’s from the best business schools. Gone is the respect for knowledge gained by those who have worked for companies for decades, and understand what made their companies successful.
By James Turnage