Using the economy as an excuse to shortchange employees

I’ve seen companies do some pretty disgusting things in my time, and the move some of them are pulling lately definitely ranks right up there with some of the biggest stinkers.

In effect, they’re using the current weak economy/recession as an excuse to lay off employees and burden the existing ones with the extra work, while keeping them mum under the fear of losing their jobs. If this isn’t corporate exploitation of its workforce, I don’t know what is.

I’m going to give you three examples, each juicier than the other, but I’m sure you can come up with more if you’re in the US and you’re employed in a full time job.

The niche business with an owner

I talked with an employee from a certain company lately, one which specializes in a niche market that has not been affected by the economic slowdown, nor does it look like it will be affected any time soon. I can’t disclose any identifying details, because the employee confided in me. What he told me was this: the president (and owner) of the company fired some employees while cutting year-end bonuses for the rest of the employees, using the recession as an excuse. The employees, the ones doing the hard work, have been handling a record amount of business for the past year, but the president cited a slump in incoming business. I was told the same president has been spending lavishly to expand his own mansion and buy extra cars and toys, during the same year when the supposed slump in business took place.

Adobe’s record profits

This example is more concrete than the previous one. In December, Adobe reported record revenues for the 4th quarter of 2008, and the sixth consecutive year of double-digit growth, yet they still laid off employees in November just the same. I’m not surprised though. I talked with a friend who is a long-time software developer, and he told me Adobe has another ugly habit: historically speaking, they have relied mostly on contractors, because it’s cheaper, and they’re easier to shed without bad press.

JPG Mag starts a bidding frenzy

Let’s look at JPG Mag. It’s the darling of many amateur photographers, because it gave them the chance to publish their work when other magazines might turn them down. I never really liked it, and I’ll tell you why: I thought they were cheap.

Here was an easy way to get print-worthy photographs without paying a dime. Turns out you could get amateur shutterbugs happy and willing to give away their work simply by dangling the illusory promise of publishing their pics in your magazine. The incentive was fame, which is as fleeting as a fart and just as troublesome, if you’ll excuse my expression. Where’s the moolah? Last I checked, bills were still payable in money, not fame.

When they announced they were going under, I thought it fitting. Good riddance to bad rubbish. First they don’t pay the photographers, then they fire the founders, now they’re going under — okay by me. Unfortunately, the buzz generated by their announcement stirred the vanities of those with bigger wallets, and a bidding war began.

But wait, there’s a nugget of bitter truth to be found among all this fake glimmer and shine. Turns out they fired all their employees, and now the CEO trumpets the company’s earning potential in messages to the bidders. PDN Pulse called them out on this, and rightfully so. Sure, now the company has earning potential since everyone’s gone. Hire a skeleton staff, make them do double or triple the work, pay no money to the photographers, and you’ve got a hand-dandy business model fit for the 21st century.

To sum things up

So you see, it’s okay to use the economy as an excuse when it befits your bottom line. Apparently, it’s okay to lay off people, it doesn’t matter that they’ve got bills to pay, that they’ve put a lot of hard work and time into your company. You shouldn’t do what you can to protect them in a weak economy when it’s harder to get jobs.

None of that matters, right? Ethics are so passé. You just use whatever excuse you can to make sure your precious bottom line gets bigger and bigger. It’s all about GREED. You can never have enough money, and people are only a means to it, right?

Well, I think that’s wrong. I don’t care if you’re afraid that the recession will affect your company. I don’t care if you really want that shiny new toy and a couple of employees and their mortgages stand in your way of getting it. I don’t care if your stockholders will bitch. If greed and money are your only motivators when you run a business, and you’d gladly step over people to balance the spreadsheets — don’t give me any of that I’m so sorry and I feel your pain crap — then you’re a spineless, slimy, pus-covered slug, and you deserve to be squashed under a steel-toe boot.


19 thoughts on “Using the economy as an excuse to shortchange employees

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  2. Bob says:

    I have one word for you. GREED. It won’t just destroy this country from the insode out – it will eventually destroy the world. It’s sickening. Multi-million dollar diamond rings for the rich while people starve and lose their homes. Disgusting. I think the best solution is anarchy and the “peasants” (as they see us) will rise up and kill the wealthy in the streets and start over. There are way more of us than there are of them and I bet we’re better armed.


    • Bob, anarchy is never a solution. The usual path from anarchy is toward totalitarianism, so in other words, what you’re advocating would help bring into power a violent despot who would have no problems killing people left and right, since that’s what brought him to power in the first place.

      I have hope for the Occupy movement. It’s helping iterate the complaints that people have with the current situation, and it may lead to a better social contract. We’ll see.


  3. john says:

    I am experiencing the same treatment from a company I am with. They are “performance managing” higher paid workers out. I think things will get much worse in America , and as a matter of fact, I predict that 96% of Americans will be living in tents in the dirt fields outside a corporate wall like a Palestinian.


  4. Steve says:

    Couldn’t agree more with the original article and most of the comments being posted as follow up. I’m glad someone has published the situation regarding employers using the economy and fear tactics as an excuse to not pay their employees. Recently I was a victim of this exact situation. My problem though is I was one of the employees that was retained while my co-workers dwindled every month. The layoffs may have been warranted at the time, but what happened when business came out of its slump and clients came back wanting to spend money? You guessed it, instead of hiring additional staff or bringing on new employees I was expected to do the jobs of those who no longer worked there. Employers response being, you’re lucky to have a job, suck it up and get it done. And I did. Put in the extra hours, put the extra stress on myself and my family, saw the real number revenues being generated by my hard work and extra time. Great you say, a real go getter. Well what happens when my yearly review comes around? I’m told sorry, you’re doing a great job…. BUT the economy is bad, we’ve put holds on all raises, bonuses and new hires. Are you kidding me?

    The point of the sad situation is, employers will take advantage. And will CONTINUE to take advantage until you the employee do something about it. I know it seems tough out there in the job market and the unemployment numbers confirm that, but only you as an employee can truly fight back against corporations by not accepting their policies of abuse. Knuckle down, put your resume together and fearlessly search for something new. If you’re lucky like me you will come out making 30% more at your new gig because you put your foot down and said you won’t stand for their abuse.

    Good luck to everyone!


  5. Meg says:

    I have someone in my family this is happening to. 20+ yr experience in his field, and recently landed a good job as a project manager paying a good wage. Well, the company had a big shake up and there might not be any new projects for him after February.
    So he went to look for another job and has a company wanting him- but only at a fraction of what he’s worth.
    They want him to be project manager for three different construction projects but want to pay him squat.


  6. PizzaSteve says:

    I believe the reason they take care of employees in boom times is because they know that employee can walk out and get 5 job offers elsewhere.

    I am the victim of this dirty pool where I work. I’m a contractor been at this place for 2 years. No pay raise and I feel pigeon holed and my skilled are stagnating in old technology.

    Other contractors are worried about losing their jobs and tempers are short and people are picking and snarking at each other. This one developer went to a freaking executive to complain I sent him too many emails!

    My boss has been telling me all along what stellar work I do and he is glad I am there. Yeah I know bs talk because he certainly hasn’t thanked me in my paycheck.

    When he doesn’t like people he takes the cowardly route and doesn’t renew their contract citing not enough work to do.

    That is the excuse he is going to give me. I will probably call him on it in a nice way. He is always spouting off how he appreciates honesty.


  7. Sandy says:

    The latest trend is “furloughs,” being forced to take off without pay. And who’s screaming socialism and no choice?
    On top of that, no raises for years and years, not just one year, while inflation and the cost of living shoot through the roof. While the government protects the banks and credit card companies, providing loans to them at no interest, these same thieves have raised interest rates to usury levels on the very people who bailed them out: the taxpayers.
    Where does it end? I believe there needs to be new legislation to protect the common worker against such atrocities. The Discover Card recently froze my account and robbed me of $1,700 because I had a joint account with my boyfriend, who owed them money I didn’t even know about. Even after we made arrangements to pay them (after they took my money), they proceeded to rob my boyfriend of the last $287 he had in his bank account the other day, while he tried to cook a meal for him and his son by scraping up some loose change …


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  9. Patrick says:

    Here’s my theory. On September 10, 2001, the US economy was doing great. Companies were taking care of their employees, because they saw that their employees were the vehicle through which they made money. Everyone was happy, and the world was good. Then, 9/11. Several industries felt a large hit after that. I for one, worked for a toy company. Toy sales fell a lot, and employees were let go. This was a valid reason. The sales were not there, so those people could not be afforded. Then what happened is what i believe caused us to be in the situation we are in with corporate greed today. People were required to do the work not only that they used to do, but what 2 or 3 other people who were let go used to do as well. They did this without complaint, knowing that things would get back to the way they used to be. Part of the things DID get back to the way they used to be. Namely, sales. 9/11 caused a hit, but it turned out to be temporary. Sales rebounded. But now – we’ve got an interesting situation. We can still operate the company just as effectively with a lot less staff. That means higher profits. Let’s NOT bring back those people we let go. And so it began. This was the turning point of the American corporate landscape. The CEO’s can make just as much money if not more, without having to spend it on the employees. And , heck, if it worked once right after 9/11, who says it can’t work again and again? Stock prices are down a bit? Fire some folks. Need to buy a new building? Fire some folks. Economy sucks? Fire some folks. As long as you have a skeleton staff who are now doing the jobs of 6 or 7 people, you are golden. Those people won’t complain. They are afraid to get fired themselves.

    I think the only real solution is a major governmental backed reform of corporate America. There should be audits of all companies, and if their profits are back up, then they should be required to replace the people they let go.

    Of course, that will never happen. The problem is, the people with the greed are also usually the people wiht the money, and the power to make sure they keep getting their way.


    • Patrick, thank you for your insight. You’re right, it make sense when you look at it from your perspective. I’d love to see some corporate reform, but I wouldn’t want to see the excessive regulation that happened when SOX was introduced, which was just horrible. I’d like to see some quantification of how much work a single person can do in each field of work, then see that rule applied across the board in all corporations. The difficult part is calculating the quantity of work somehow, which is particularly difficult when you work in the information-rich fields that dominate American industry nowadays. It’s not like we’re all making cogs, so the government can’t say that each person should make 20 cogs a day or something like that. What also complicates things is that the amount of work that can get done actually slows down as each company gets larger, because each action involves a larger number of people and has to be coordinated across that group. I think the best thing that could happen is that CEOs across the board realize they can’t be exploiting people like they’re doing now. Not in this day and age. We’re not peons, and we’re not indentured servants, like in medieval times. People nowadays have rights, and they should be respected.


  10. Anothony says:

    This kind of non-sense becomes almost routine in rough times.
    Im going through it as well at my job, after seven months, I finally receive my ninety-day performance review, get a pretty great review… a ton of new responsibilities… and thats about it.

    I was told there is a freeze on raises, even though they are hiring for two (unnecessary) positions!
    And the only way to get those two positions open is to fire two necessary positions!
    Its madness!

    The people that do this to individuals should be held fully accountable for their actions, for they are in-part guilty of this ” bad economy ” their damned selves!


  11. Ann says:

    My company just did a round of lay-offs, gave everyone a 3% pay reduction, froze raises for a year, told us how much trouble they are in and subsequently created a new position for an (unnecessary) Executive VP (at a 6-figure salary)…all in less than a week. Talk about using the economy as an excuse.


  12. TIffany says:

    Hi there. I work for a buisness that is a small buisness and I work with the owner daily and also see the daily sales. Nothing has changed accept snow hit us hard for a week, and we lost a day and a half’s work (that is usually not a problem.) Our sales have not dropped at all. The owner keeps pulling the economy card and cut two full time employees down to part time, and cut all the part time employees hours by 30% and gave me more work to do on my own. I know they are not being effected, but instead are cutting all these hours in fear that they could get affected. I don’t know what to do. Is there anything I can do? Im in fear that I could get my hours cut just if The owner has a bad day of worrying.


    • That’s my point exactly, Tiffany. It’s a rotten thing for the owner of that business to do this to you, especially since he’s not affected, nor does he know if he will be. My advice is to start looking for a better job, quietly. When you find it, give him the customary two weeks’ notice and move on.


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  14. JeffH says:

    I refuse to work as a salaried employee for an employer that expects me to work more than 50 hours per week on a regular basis. It’s just not worth it! I have never been rewarded and have seen very few others be rewarded in the long run for the extra hours that they put in. Some employers hire young single people and take advantage of them like this while dangling the carrot of riches through stock options. Wake up folks, it rarely happens! Those of us with families and kids to ferry around to school and such can’t possibly work 60-80 hours weeks and keep our families together. It’s a loosing proposition for all involved. I would certainly support legislation that disincentivised employers from taking advantage of salaried employees the way many do now.


  15. Darn right, Julie! I’d forgotten about that. One of our family friends was forced to put in between 80-90 hours a week at his job last year when his employer got a fat government contract. The excuse was that the product needed to be delivered on time. Since the employer was the only one in that town where he could work (very specialized field), he had to put up with it or lose his job. It’s enough to make my blood boil when I think about these crooks.


  16. And this is new? It’s all about rewarding the folks at the top.

    I’d like to see the government put together new rules regarding exempt employees. Professionals in many fields can work 60 or more hours a week with no extra pay, and there are employers that take advantage of that. Why hire three people at 40 hours a week when two people can work at 60? And the people who put in 60 hours a week can lose their jobs if they complain.

    As a creative married to a programmer, I certainly understand the principle of putting in hours on deadline. I’m not against that, but putting in those kind of hours on a regular basis is not good. I’d love to see a limit of 50 hours a week for professionals, and anything beyond that is paid overtime. The business lobbies won’t let it happen, though.


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