The Bottom Line Matters Less Than Your Employees

My (very large) company has responded to difficult economic times by abandoning their previous focus on retaining top engineering talent and focusing instead on short-term profitability. Our services were considered too expensive compared to the other companies in our market and top management decided to cut costs wherever possible, including reorganizing to eliminate a division, spinning off a division that was solid and profitable but not part of our core business (whatever that is), and decreasing overhead.

The drive to decrease overhead has meant that when contracts end, engineers of all levels and abilities are given a quick chance to find new work and then laid off. My group was also recently relocated to a building with the worst commute in the region, which is owned by my company and saves them some money, but has caused many to consider leaving for a less taxing commute. The kind of work we do often requires very specific domain knowledge, and we are rapidly losing much of this knowledge because many engineers (especially top talent) are leaving for companies with a more balanced approach to business.

The shareholders appear to be happy with the cost savings, which means the CEO and other senior management get to keep their jobs and their multi-million dollar salaries and benefits, but we are slowly becoming a hollow company, something our customers have already noticed thanks to the departure of senior engineers and project managers, and the temporary presence of people like me on various projects to help them through crises (again due to the departure of these projects’ senior staff). This results in my own project being hurt somewhat, mitigated by my project’s luck in having great talent with good work ethics at all levels, but the long term impact is that we have lost the confidence of some of our customers, it’s very difficult to hire replacements for people we lose, and many of us are under the strain of working much more than reasonable just to keep projects afloat.

I’m staying with my current company only because I love the people I work with and the work I do on my current project, something I know from experience is pretty rare. Should my project end or be won by another company in future, I will have no compunction at all in leaving this company and doing my best to take good people with me.

All of which brings me to the article linked below. The bottom line certainly counts, but companies that place their shareholders ahead of their customers and employees are doomed and moreover they deserve to die for failing to understand such a basic aspect of business life.

http://www.businessinsider.com/instant-mba-richard-grasso-nyse-2011-11

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