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2/14/2010
08:53 PM
Bob Evans
Bob Evans
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Global CIO: Hewlett-Packard And Oracle Layoffs Are Ugly But Essential

While layoffs can be heartbreaking, they're also an indispensable fact of life in the dynamic global IT business.

In the past decade, Hewlett-Packard has reportedly laid off 75,505 employees, and very soon Oracle-Sun will be laying off about 1,000 employees. For many or most of those workers, that job loss was a vicious blow financially and in terms of family security—and the hearts of everyone who can fog a mirror surely go out to these people.

But in a distorted application of that basic human sympathy, two columnists in theSan Jose Mercury News are portraying the cutbacks as nothing more than greedy corporate bosses slashing blindly and injudiciously at their employee ranks for the sole purpose of sucking out more profits. Big Business pursuing Big Greed at the expense of The Little Man.

And it's all a whiny bunch of nonsense.

The columns hint at but never address some fundamental questions: during these turbulent times in our recession-battered global economy, where should the line be drawn between corporations as stewards of employment, and corporations as profit-driven enterprises? In a rapidly shifting and fast-paced global marketplace, what is the responsibility of a business to its employees, and what expectations should employees have about their bosses' obligations toward them? Are corporations in business to hire as many people as possible, or are they in business to provide superior products and services that delight customers and thereby generate strong financial rewards for the owners who have put their capital, time, and energy at risk?

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More important are the broader questions that these sniveling stories seem to raise about our appetite here in the U.S. for unfettered, high-stakes, and highly disruptive global competition: are we going to cripple our leading corporations by pushing them toward the policies the Merc columnists seem to endorse: that employment is a right, that profits are overrated, and that incessant corporate adaptation and improvement is merely cheap talk aimed at covering up for cutting more workers?

High tech has been the dominant driver of American success and prosperity over the past 50 years, and if we start to lose our stomach for global competition and the relentless striving for excellence, then we're going to see layoffs at HP and Oracle and many many other tech companies that will make the ones cited in these columns seem like boom times.

Let's take a look at some of the ideas raised in these two columns from a media property deeply entrenched in the Silicon Valley community where HP and Oracle are both based—and let's see if they tell us a little about ourselves, our tolerance for risk, our self-reliance, and our feelings toward free-market capitalism that have combined to make the United States the most prosperous, free, and sought-after country the world has ever known.

On HP's layoffs of 75,505 in the past 10 years, columnist Chris O'Brien tosses in this striking fact as little more than a footnote: " Despite the cuts, HP's workforce has tripled in size as the company hired people in new areas and bought companies such as Compaq and EDS."

So O'Brien is stating that HP, in the past decade, has tripled the size of its workforce—tripled it—yet he seems baffled that during those times of massive change in global business and in the overall IT sector, and with two massive acquisitions, HP had to cut a lot of jobs. What he doesn't really take into account is that HP had no alternative if it was to succeed in transforming its business to meet the needs of a new customers requiring new products and new solutions—that's the central issue, but O'Brien dismisses it with fuzzy generalizations like this one:

"When their companies stumble—as HP did in the 1990s—most CEOs generally use only two strategies to fix things: fire lots of people, or buy another company."

No new products? No new strategies? No new marketing channels, partnerships, technologies, geographic adjustments, pricing changes, services strategies? O'Brien makes no mention of that because it ruins his core and predetermined narrative: that big companies are selfish brutes out to exploit The Little Man:

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