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- W344387734 abstract "You can make a case for layoffs being, on the whole, a good thing. They can save a company from going belly up, for example, costing all of its employees their jobs. They can help make a company more competitive, thus enabling it to grow, provide a better return to shareholders, and offer better service to customers. Layoffs may even be good for some of those laid off--it's not unheard of that laid-off employees end up happier and sometimes wealthier (especially if they're entitled to a generous severance package) than before the axe fell. Some or all of the above can be true. Some or all of it can be sophistry. Where your views fall on the subject may bear a direct relationship to how secure you feel your job is. you may find it interesting that several comments in our cover story on merger strategies (p. 31) fell closer to the sophistry side of the argument. The article summarizes a lively panel discussion among five bank merger and acquisition players. One of the points they raised was that striving for cost efficiency--which almost always revolves around layoffs--can be overdone. That's because it can cripple a company's ability to generate revenue. Another point the group made was that the aggressive predictions regarding cost savings and revenue enhancements made when a deal is announced often amount to justifying the deal to the investor community--that is to say, justifying the high price paid. In last month's M&A Observer column, you may have noticed we quoted consultant David Partridge as saying, Indiscriminately laying off employees could be bankers' biggest competitive blunder. Presumably few bankers think they have laid off people indiscriminately, so we were curious why Partridge, who is director of Towers Perrin's Financial Institutions Practice, felt this way. In an interview, he made the point that acquiring banks have little choice in the matter of layoffs given the prices they pay for an acquisition. In-market mergers are a great temptation, he said. But there is great danger in shoving two banks together and herding customers down the First of all, he said, if the customers of the acquired bank had wanted to do business with the acquiring bank, they would have, considering that a branch of the acquiror is probably right across the street. Younger people--under 40--don't do much business with banks anyway, said Partridge, but for the older customers that do, will they stay if you fire most of the people they know? …" @default.
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- W344387734 title "Casualties of Business" @default.
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