Management is well-aware that employees are a major expense on the P/L statement. Yet, in periods of economic prosperity, they hire like sailors drinking alcohol on shore leave, to epic excess, with little care for tomorrow. Then the hard times hit, and the same management who over-hired now feels obligated to cut the same heads they themselves hired.
Management offers excuses rather than admit they have failed to adapt to economic conditions. Yes, there are many factors outside of their control like a pandemic, for example. But you can certainly actively adapt to even the direst situation. The team I’m on didn’t miss a beat during the lockdown because we adapted to the conditions of remote collaboration. We didn’t offer up excuses.
There are levers you can pull when you first notice inflationary pressures in the economy or supply-chain issues. That’s why the business has a finance team. They are supposed to pay attention to economic indicators. Salespeople know when times are tough – because sales lag. Again, we have sales and marketing teams that are supposed to be paying attention and feed that back so we can adapt. The business also has a Sourcing team that should have their thumb on the pulse of the markets but don’t. They have been very slow to react. And in some instances, they have yet to act. And this despite months, if not years, of us telling them price and lead-time are going up, stock is going down.
It’s preposterous to think that nobody in GE is paying attention to economic factors that clearly affect our bottom-line. Right? We have 38,000 employees as of early 2022 (2021 annual report). Surely 10% of this total is management. Be conservative and cut it in half at 1,900. If only 10% of them, or 190 members of management, were paying attention, then what happened? How did we miss the mark so horribly that we have to lay-off a double-digit percentage of the entire GERE workforce? This only makes logical sense if management was asleep at the wheel. And clearly, they were.
Our management is way too slow adapting to reality. This has directly resulted in our poor financial performance and these layoffs. Had management reacted correctly in real-time, fiscal actions could have been taken that may have prevented this dehumanizing process we call the layoff. GE apparently management enjoys the layoff since they use it so often.
Any number of actions could be taken on both the revenue and expense side of the P/L statement. Because there is potentially time for corrective action when/if you are paying attention. Instead, our management failed to act until they painted themselves into a corner with limited options. This must be the point at which “salary expense” lights up like a neon sign. Like a big fat rock to a crack addict.
For these reasons, the layoff can be considered the ultimate failure of management. And GE Renewable Energy is loaded with management failures. It’s always too little too late.