Sunday, December 12, 2010

Recession and Lay-offs

The recession in 2008-09 ignited the phenomenon of lay-offs to a degree which was absolutely dangerous for the world economy. Companies had relied more on reducing staff size rather than reducing salary size for containing the impact of recession. It could have led to major economic devastation and social instability. Massive job-cuts could have led to grossly reduced demand which in turn would have necessitated more job-cuts (this is a self-feeding cycle).

Everyone was impacted except few. Those whose life-style was minimally impacted by the recession were from one of the following groups:
  • Capitalists / Business Owners and Promoters - they had mercilessly taken actions to protect their profit goal achievement
  • High Net Worth Individuals /Institutional Investors - they already had enough that the losses to them were probably a tiny fraction of what they held
  • Bankers - they always know how to squeeze that last rupee
And who were impacted the most? Here's the list:
  • Daily Labor (Construction Workers, etc.)
  • "Normal" Employees of Private Corporations. This doesn't include the senior management, executive leadership, board members (they are the proverbial fat cats who get big bonuses even though the companies they lead may make heavy losses)
  • The Common Man - who lives life from month to month waiting eagerly for the salary every month to pay for basic expenses
It seems, recovery is on the way... but the damage it has done already is exorbitantly high. Many individuals and families have been thrown into economic darkness! Recovery should first shed light on the individuals and families who have been impacted the most. However, in reality, it will bring louder cheers to the Capitalists / Business Owners and Promoters,High Net Worth Individuals /Institutional Investor and Bankers.

Popular Posts

Blog Archive