Misleading layoff news

July 27, 2009

Verizon reported weak Q2 results today due to shrinkage in their wireline unit.  So of course they announced more layoffs, which is just standard operating procedure for a CFO wanting to reassure The Street that costs are being contained and profitability is being restored next quarter.  Whether those cuts actually materialize no one ever checks.

So you end up with a scary “Verizon to Cut 8,000 More Jobs” headline on the Journal‘s and other front pages.

Meanwhile we learn that they are aggressively adding FiOS TV and broadband customers, and the rumor is they are hurrying to launch their LTE network in early 2010, perhaps for Apple’s tablet, which you would think requires serious capital investments and manpower for deployment.  So you have to wonder what the net effect is on jobs.  Definitely not 8,000 fewer.

And of course Microsoft is opening dozens of stores, and 7-Eleven is planning a major expansion this year, including 600 stores in Southern California alone.  But you would never see this headline on the front pages: “7-Eleven adding 5,000 jobs”.

3 Responses to “Misleading layoff news”

  1. still thinking of one Says:

    You are turning into Sarah Palin with your media complaints. The only people who care about an individual company’s job announcements are people working for those companies and, to a much smaller degree, people who own stock in it. Yes, the editor who threw that headline up is trying to sensationalize a very boring and largely irrelevant piece of news. So what? He needs ratings and hits to justify his ad prices. He’s just doing his job. And getting paid for his job. And it’s his taxes that are paying for the unemployment subsidies for these Verizon cast offs. So say ‘thank you’ to the nice media man and move on.

  2. maristi Says:

    Oh no you didn’t !!

    You forgot about a third group that cares about these announcements: The general public. They read the headline with the morning paper, hear it in the drive to work, and then tell a friend at the water cooler. And it just adds to the general malaise.

    A dozen of these on a given month easily shaves five points off next month’s MCSI.

    And you’re right, that’s just how the biz works: Drive traffic, sell ads, keep your job, pay your taxes.

    But here’s where we differ:

    Your more conservative (and cynical) view is that things are the way they are and one must simply learn to work the system, and subsequently rise above those who don’t.

    My more progressive view is that I try to understand that system, and work it, but also call out its wrongs, and do whatever little I can do to change it.

    I don’t believe it’s a zero-sum game.

  3. still thinking of one Says:

    General public does not care about these announcements. The perceived propaganda impact is all in the heads of people who want to blame somebody when things are going their way. Economy is still tanking? Well it couldn’t possibly be because Obama’s plans are not working, so it must be media’s fault! That’s the same thing that Iranian guy said Zakaria this weekend: all the demonstrations are the fault of 20 West financed TV channels that are being broadcast into Iran and incite unrest. He wasn’t lying. There are over 20 West financed channels and the way they report the news is certainly isn’t calming, but to claim that that’s what’s caused the events is ridiculous.
    As for your ‘work the system’ comment: I don’t care for systems. There’s one principal driver of humanity: SELF INTEREST. Any successful system needs to harvest it. The way you harvest it for common good is COMPETITION. Any successful system must foster competition. COMPETITION can only exist if there’s customer feedback. Any successful system must ensure this effect. All government oversight must be directed not at regulating products and byproducts like prices and quality, but by fostering successful competing environment. This is where the current system failed: our corporate environment has become isolated from its customer, the shareholders. As a result it has turned into a huge money grabbing cabal that’s destroying this economy. Something that happens when SELF-INTEREST is not mitigated by true competition. This is where reforms should be focused. Not through oversight, as that simply expands the cabal to include the new overseers whose corruption is only a function of time, but by overhauling virtually every corporate rule existing right now (yes, I’m proposing far more drastic reforms than pretty much anyone). From removing the legal wall between corporation and individual, to assigning fiduciary responsibilities to corporate officers, to severely curtailing general public ownership of corporations, and certainly stopping any and all infusion of government monies into those entities. We can discuss these in detail over BBQ and tequila.

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