Job cuts move to headquarters' staffs
Feb 20th 2009 8:00AM
Updated Dec 3rd 2009 10:20AM
Most big company job cuts come from workers at stores and in factories. People who work in the accounting, PR, and administrative positions in headquarters' operations are rarely part of downsizing. Their jobs are supposed to be essential to running a public company.
That has changed in the last few weeks. Borders (BGP), the troubled bookseller, just cut over 100 people in its home office. Best Buy (BBY) has laid off staff at its headquarters. The car companies are making aggressive moves to get white collar workers out the door.
The news about these companies is probably another indication that this recession is much deeper than others. The people who work at a firm's home office are there to support the CEO, CFO, and other senior officers. Top management must believe that if it can do without a private jet, it can do without people who were previously critical to running their companies.
Is there a fall-out from the trend? There may be two. White collar workers will be challenged to find jobs at the pay levels they have become used to. That means that they may be out of work longer than other people who have lost employment. But, more important, can a public company take care of normal activities with a bare-bones staff? It has to provide services to shareholders -- basic services like accounting, legal work, and investor relations. Taking people out of these jobs may save a little money, but it may not do any favors to people who own the stocks.
Douglas A. McIntyre is an editor at 24/7 Wall St.