Thursday, July 17, 2014
For example mass firings when economy is weak i.e. 'downturn', mass firing when economy is booming i.e. 'restructuring' and when companies outsource their manufacturing and customer service call center jobs abroad..
But one that few think about until it directly happens to them is known as 'Mergers & Acquisitions'.
This is where one company takes control of another and either the dominant business strips the submissive one to the economic bone or rids itself of excess salary since the new company's employees can do the same work for less..
Microsoft is one of those companies having recently acquired Nokia Devices and Services and at the beginning of the week and announced 6,000 Microsoft jobs would be eliminated as suddenly these men and women were now deemed redundant
Turns out Microsoft got their numbers wrong by a mere 66%
18,000 men and women's jobs will be eliminated instead with 12,500 of those positions being professional and factory positions..
We're talking real jobs with real salary.. The kind that allow one to pay all their bills, live very nice and still have savings to put aside for lil Jeff and Jenny to go to college
From Microsoft's PR release:
"The company expects to incur pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters, including $750 million to $800 million for severance and related benefit costs, and $350 million to $800 million of asset-related charges."
So imagine how long term profitable Microsoft expects this salary dump to be that they'd be so willing to incur over $2 billion in cost to achieve this numeric goal.
They're all the same.. utter scum
They'll set aside billions for their vanity foundations and public relations charity projects yet have no care or concern the effect it has of tossing away people who've devoted their adult lives to being in their employ...
Let's try to break this down using very simple math so you can see how national and local economies feel the brunt of decisions like this..
$60k x 18,000 equals $1.08 billion dollars Microsoft will not have to shell out in salary for the next 12 month period as these mass firings are implemented.
These people will now be dependent upon the US government's teat for up to the next 99 months as well paying jobs are very hard to come by in this service-sector society and often will be receiving a fraction of what they were once accustomed to earning
The US income tax bracket for those earning $60k is 25%.. For those earning between $9k and $36k, the tax rate is 15%
$1.08 billion x 25% equals $270 million in tax revenue
Now based on the average person receiving $20k in benefits since there's maximums a state will pay per week regardless of how much you earned...
$20k x 18,000 people equals $360 million in unemployment
Then based on a 15% tax rate, $360m x 15% equals $54 million
$270 million - $54 million equals...
The US government will be deprived $226 million in tax revenue over a 12 month period based on Microsoft's decision.
And who makes up that shortfall?
Usually no one.. The government doesn't want to tax the wealthy or the corporations and we don't generate enough income tax as it is to pay our bills, so we just borrow more..
Survive to live another day..
Businesses take a different tact.. they will unemotionally cut and slash and burn to save a penny here, a nickle there because they're always thinking long term.
And ironically, Microsoft's cold-calculation decision will force thousands to now think very short term: 'How much savings do I have?.. How many months or weeks before I start missing payments?.. What do I cut back on first?. etc..'
And while we wholeheartedly agree we need a different and better leader from this pompous 'professor' in charge; this lightweight academic, we also state a common refrain of 'Careful what one wishes for' when seeking a businessman to run this nation..
Because at least when a corporation cuts the legs from under their employees, there's social safety nets in place to catch the fall..
But who's going to catch you when the nets themselves are removed in order to repay another half-percent on the deficit?
Posted by Susquehanna at Thursday, July 17, 2014