You may have read in the news last week that a prominent West Coast Biotech has decided to close two of its locations in the US and cut 15% of its workforce, mostly affecting US staff. And it announced this move in the same press conference in which it reported excellent earnings.
You may also have noticed that stock market analysts cheered the announcement and investors responded to move the company's shares to an all-time high, if only for a brief while.
That response may be because it is Business 101 to manage profit in a more tightly competitive market where sales may increase more slowly than before by cutting the bottom line, meaning staff and infrastructure. But when that bottom line move guts communities and leaves skilled workers on the sidewalk it's a painfully sad event (even if the push out the door is done with velvet gloves, it's still a push).
It's even sadder when the hammer falls harder on US workers than the company's foreign workforce, especially considering the US is still that company's number 1 market, and likely to be so for some time to come.
Even so, this company is just doing what is considered the best way for a business to operate today; nothing unusual at all. But that is precisely why this move bothers me so much - that businesses consider this standard procedure.
Consider there are two ways to manage the situation this West Coast Bio faced: What they did - cut costs ahead of need; or, use their excellent earnings to buy some time to figure out how to better utilize those US locations and staff to make the company even stronger and more competitive.
To take the second path involves some complex thinking and planning, and then execution. Taking the first path is easy, and I guess that at least partly explains the decision. But there's more to it I think. There's the impression that this company - like many modern corporations, considers only the Board of Directors and Executive Management to be 'the company', with employees just resources to add or drop like ballast.
You may also have noticed that stock market analysts cheered the announcement and investors responded to move the company's shares to an all-time high, if only for a brief while.
That response may be because it is Business 101 to manage profit in a more tightly competitive market where sales may increase more slowly than before by cutting the bottom line, meaning staff and infrastructure. But when that bottom line move guts communities and leaves skilled workers on the sidewalk it's a painfully sad event (even if the push out the door is done with velvet gloves, it's still a push).
It's even sadder when the hammer falls harder on US workers than the company's foreign workforce, especially considering the US is still that company's number 1 market, and likely to be so for some time to come.
Even so, this company is just doing what is considered the best way for a business to operate today; nothing unusual at all. But that is precisely why this move bothers me so much - that businesses consider this standard procedure.
Consider there are two ways to manage the situation this West Coast Bio faced: What they did - cut costs ahead of need; or, use their excellent earnings to buy some time to figure out how to better utilize those US locations and staff to make the company even stronger and more competitive.
To take the second path involves some complex thinking and planning, and then execution. Taking the first path is easy, and I guess that at least partly explains the decision. But there's more to it I think. There's the impression that this company - like many modern corporations, considers only the Board of Directors and Executive Management to be 'the company', with employees just resources to add or drop like ballast.
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