Originally posted by sigma:


It's almost never good for a company to announce layoffs. Any cost-savings from the layoff can be immediately rescinded by a drop in stock price.



My company stock took a big increase on announcement of layoffs. My experience is that wall street loves when a company lays off and saves a bunch of money. Reducing overhead and operating expenses is almost always good for stock. I believe it is the other way, they announce layoffs say 50,000 employees (We reduced from 250,000) when they really retired some with pensions (given an early retirement package), some were attrition, etc probably about half of them in all. In fact, they hired quite a number back as "outside consultants" who were not technically employees but private contractors.
By taking them off the "payroll" and having them be an "expense" instead, they really exaggerated the layoffs.

We outsourced a lot of work (to foreign places like North Carolina and Georgia) where the "new" companies supplying us with materials hired quite a few of the laid off employees. Of the 50000, half were leaving anyway, and i am guessing because I don't have the exact numbers, but I bet "only" 5,000-10,000 actually had to go on to find another job. Not good, but not as bad as the original number sounded. Interestingly enough, the bulk of the people hit the hardest were the union people. Many white collar people can bring their skills to other fields easily. The union force skills are narrow enough that sometimes we were the only game in town. If you are a "Tube Expander" for heat exchangers, there aren't as many opportunities as an Office Manager, for instance.

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