Please keep our discussion polite and without profanity?
10 replies (most recent on top)
Anonymous58321 - from the executive perspective, look at layoffs like a catharsis - that's your opportunity to eliminate dead weight, low performers, people who are 'resting and vesting', etc. Also, you do not want to be in a position where you cut salaries and your competitor cuts payroll and keep salaries, in that case, your top performers will be jumping ship and going to work for the competitor as they kept salaries higher, in that case, it's a lose lose situation, you'd keep dead weight and poor performer, your top performers would go work for the competitor, the competitor would get stronger and all your folks would be pissed. finally, never underestimate greed that drives executives, they do not want their compensation cut and will do everything to keep milking the cow
I've always wondered, why lay off when you can use salary reductions? Giving 7.5% the boot hurts. Why not cut everyone's pay by that percentage, say, reducing $100,000 to $92,500? No one would miss the $7,500 - that extra $7,500 would have been taxed at, say, 35%. For a $5,000 effective reduction, a company would retain key people not to mention important skills.
When things turn they will be understaffed and late on deliveries as was the case last time around. In the meantime morale is in the crapper. They will lose more talent. Folks will jump ship. It will be hard to hire when things turn around. They will have to turn to other industries just to get bodies back and they will not have the overall experience level. Then they will be whining about retention again. I know SLB is the supposed industry leader and supposed to set the tone but it seems they knee jerked quickly and drastically. Remains to be seen if this bites them in the butt.
Exactly what Anonymous58285 said. Lots of companies in oil and gas are doing layoffs right now. If the layoffs at SLB were solely Kibsgaard's fault, then why are other companies doing layoffs, too? Did all oil and gas CEO's call a meeting to decide how to destroy their companies? Of course not. The market took a dive, companies convert to survival mode because they don't know how low oil prices will get, or for how long.
Personally, I have been on both sides of the table. I have had to lay people off before, and it's hard. Even the quality of life for people staying will be difficult because business expectations won't lessen because of a smaller workforce and fewer resources. I have also been laid off from jobs (not in oil and gas) about 3 times, so I know what it's like to have to pick yourself up afterwards. Having experience both sides of these kinds of unfortunate events, I can honestly say that nobody wins.
I know some people may be frustrated because the CEO still makes millions during a tough economic time, but that's an entirely different discussion. Although one may expect a humble CEO to reduce his or her salary in times like these to prevent layoffs, the reality is that even if Kibsgaard reduced his salary to $0 it wouldn't be enough. The company is too big. It is the CEO's job to ensure the company survives times like these. It's much better to lay off 9000 people ASAP than drop the entire 120,000 because they didn't react to a declining market.
Does all of this suck? Yes. Are the layoffs appropriate? Absolutely.
Financial health is improved and driven in the longer term by motivated and loyal employees, good business strategies, innovation and risk acceptance culture and client acceptance of the value delivered by the company
To focus just on the financial numbers to the expense of the other elements is a recipe for disaster
Schlumberger does not have loyal motivated employees anymore, management is risk averse because they don't like to stick their head above the water to ask for capex and get shot down so innovation is stifled, the whole size is better strategy is questionable as slb lose the flexibility, efficiency and low cost base of a smaller company and last but not least the clients are tired of slb high costs and the constant internal focus of slb management rather than the tight client relationship approach of smaller companies who are much more adaptable to their needs.
the financial results of the last few years have been mediocre at best and the so called transformation initiative has still not delivered anything real
Anonymous 58285 is right on the money. This is the market. This is the nature of the beast. This is the way it is in corporate America. This is no one's fault.
and SLB is not having a "downfall." They are taking necessary steps to help ensure it DOESN'T. Does it suck? Yes. Can it be helped, given the current climate in the oil & gas industry? No.
Well said Anonymous58285.
It's nobody fault, the market turned and that is it. When things go up, you expand to meet the demand so you avoid losing market share, when things slow down, you downsize to avoid losing profits. It's simple as that, nobody should be at fault here, they managed the company well. Think about it, we are the fist one to announce layoffs, we will recover the first and be in the best position to scoop up small companies at lower price as we will be very healthy financially. Now, with all this being said, I might get a pink slip tomorrow, and I might not be here to witness the recovery, yet, as a business person I understand the move 100%. On the other hand, we can argue if the layoffs have been handled well, was there enough compassion, etc. That's a different subject, I think there was a dozen or so areas as it relates to the execution of layoffs where we should have done better.
it's solely Kibsgaard fault
The whole C-leve line up is guilty here... Kibsgaard fist, Schorn, Aaron Gatt Floridia, I dont get Khaled Al Mogharbel, Sherif Foda is a nut case, Drummond, Bowman, Gatti, we have a long list here...