I have been thinking for quite some time now that why do job cuts happen?
The question which should have been asked at first place, why did these companies hired at all, when they had to fire so many people. If it is about just profitability and Share price then these companies have such narrow thinking, cos the employer also are stake holders in any organisations.
Business operates in an enviroment and it is the same enviroment to which it reacts and works in. what it gives to the envirornment comes back to itself in some diffrent form. An environment effects the business in many ways.
For example Suppose a company manufactures soaps and it decides to cut jobs to save costs it fires 200 people aren`t these 200 people going to stop, using soap on an immediate basis of this company (probably in agony or probably they cant afford it as they don`t have job now).
More people out of job would mean lower consumption thus more fall in demand mean more job cuts and eventually company may have to shut(thus it gets wht it gives to environment)
But there is a contrary view to this, which was highlighted by my boss in one os the open discussions. i.e
If companies don`t cut jobs they will make more losses, which will spread to other companies with which it deals in normal course of operations thus crating a chain and whole economy may topple.
Well it`s right to large extent but in my understanding it all depends in what approach the leader takes. In turbulent times like this.
It`s for you to decide which one is right as views expressed here are my personal which are (right or wrong) influenced by conditioning of my thought process at various stages of my life.