- July 30, 2014
Technical Layoffs Increasing Despite Improving Economy!
Despite the Commerce Department reporting today that: a) Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a seasonally adjusted annual rate of 4.0% in the second quarter and b) the U.S. economy rebounded strongly this spring, after a first-quarter contraction, resulting in positive growth over the past six months, layoffs of technical workers are soaring! For the first half of this year 48,402 technical workers were laid off versus only 28,883 for the first half of 2013. This is almost a 68% increase! Among those with major layoffs are such stalwart technical companies as:
- HP with 16,000 cuts.
- Intel with 5,350 cuts
- Texas Instruments with 1,100 cuts
- Verizon Wireless with 1,092 cuts.
- Sony Electronics with 1,000 cuts.
This is unfortunate because technical workers are among the most highly skilled American workers including R&D, scientific, engineering, IT, technical and manufacturing talent. Furthermore, technical companies are on the cutting edge of innovations, which traditionally drive future jobs growth. So what is the answer?
Our executive recruitment firm recommends 4 measures to assist these highly valued personnel. First and foremost, I recommend a major change in thinking at most U.S. companies. The norm is to immediately shed workers during a downturn. Instead, Asian companies tend to encourage across-the-board sharing of a decline. For example, as reported recently in both the Wall Street Journal and the Huffington Post, hundreds of managers at the Samsung Electronics mobile unit voluntarily took a 25% cut in their first-half bonuses due to the company’s weakened profit performance. This is unheard of at American companies! However, adopting such a policy would not only avoid such drastic current layoffs, but also create more synergy between management and workers in the future.
If this first recommendation fails to reduce layoffs, then I have three additional, strong measures that should be offered by the Federal Government. First, spend a lot more on developing and disseminating novel retraining programs. In the Wall Street Journal article, “Just Whose Job Is It to Train Workers?,” one of the problems companies run into when trying to offer retaining for displaced workers is what is the profit benefit to the company? Though some U.S. companies like Hu-Friedy are forward thinking in their retraining offerings, most companies cannot afford to do so since there is no immediate payoff to them. That is why the government needs to step in.
Second, the government needs to encourage more entrepreneurship. Instead of launching massive, new tax burdens and mounds of regulations that stifle creativity, business expansion and jobs growth, the government needs to refocus their efforts on helping those willing to risk creating new businesses with lower taxes and less regulations! As I wrote in past articles: a) “Engineering Innovation, The Real Way To Create More Jobs: Part 3 of 3“ b) “6 Steps To Launching A Successful New Business“ and c) “Going For The Gold: Creating New Companies And Jobs With Great Ideas!“ history proves that small, high-tech, entrepreneurial ventures have accounted for almost 70% of the net new jobs created in the past 2 decades before the recent recession. Furthermore, historically, there are several tried and true formulas that work best to encourage entrepreneurship. Among them is expanding successful programs like the SBA, which has a proven track record in mentoring and providing low cost loans to entrepreneurs. Many of these highly skilled, displaced, technical workers can be encouraged to start their own R&D companies in cutting-edge industries of the future. This will greatly benefit the U.S. economy with exponentially more high paying, technical jobs!
Finally, as I wrote in the past article “Intel Workers Need To Ready Quantitative Resumes!“ these displaced workers need to be provided the best job hunting skills to increase their chances of landing their next job. Few companies currently offer any sort of outplacement assistance. That is why our executive recruiters created and offer free-of-charge the 12 Commandments of Interviewing, which are our top tips for job hunting. This is another avenue where the Federal Government can assist.
There is no easy solution to combating layoffs, but the four measures our executive recruitment team shared may be a step in the right direction.
What is your opinion?