By The Tim on January 25, 2009
Please vote in this poll using the sidebar.
Would you rather your employer...
- Lay off 10% of their employees. (51%, 115 Votes)
- Cut salaries 10% for everyone. (49%, 111 Votes)
Total Voters: 226
This poll will be active and displayed on the sidebar through 01.31.2009.
Posted in Polls | Tagged layoffs, Polls
Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.
Well, for what it’s worth, laying of 10% of people actually results in the equivalent savings of cutting 20% of salaries, since salaries are typically only about half of the overhead to keep an employee. (The rest goes to administrative costs, power costs, healthcare, building costs, management costs, etc.)
I wonder how that would change people’s votes.
I voted for across the board cuts, but would actually prefer even deeper cuts at the executive and upper management levels.
I VOTE FOR BOTH
How about a 5% [maybe 10% adding in overhead] cut in pay and 5% employee cut. Another problem with just a 10% cut in employees; it usually gets the lower paid youth, meaning you really need about a 20% cut in lower paid/seniority employees to cut 10% of the company’s average paid workers.
Albeit, like one of our previous bloggers on the MSFT layoffs said….they’ll probably find a wiley way to cut domestic experienced higher pay workers to keep cheap H-1Bs….lol…especially if the company has no union.
Where I work we had one of those…sudo-layoffs…
You know, where they give the older works an opportunity to retire early, and get a severance.. (So you get rid of you higher cost workers, stop paying health care, and over head..and rumor has due to the way the tax system works they put the severance cost into some kind of accounting place where it works as a tax benefit.. )
I’m for something more like Everett_Tom’s idea. Often there are employees who would just as soon be doing something else, who are looking for a change but need a gentle shove in the new direction. Why not let them go first.
Beyond those, it’s probably best to lay off the extra workers. The environment in which the company operates has changed, leaving it with too much capacity to operate at top efficiency. Management needs to do the hard work of realigning the workforce with the task at hand in order to best position the company for long term survival. Only by being as efficient as possible can the firm continue to outlast the competition, grow, and hopefully hire or rehire the best employees. If it doesn’t, the company may fail, and all will lose their jobs.
I agree with CorkyAgain.
As I stated in the the MS Layoffs forum. Microsoft has SO MANY mid-range managers, analysts. Its rough equivalent: parity in the NFL.
Most of these guys have semi-meaningless meetings and carry a laptop around ALL day, unless they are going to one of their 2 hour lunches or playing billiards or ping-pong. They like to email their peons who do most of the real work about stupid crap while they are in their little high-and-mighty pow-wows or in their offices.
Where I was at as a peon, some guys had offices that they seldom even used. Maybe showed up 2 days a week or sometimes not at all. I swear they can cut out at least 60% of this deadweight management.
Of course like all corporations, they will shaft the American worker. Keep as many H1-b’s as possible and these managers will be lauded(and kept) for helping see the company though this “difficult time”.
My take on Microsoft and Real-estate is this:
As long as they keep these type of “managers” and “analysts” and keep hiring them for $90k+ a year. The realestate market here will come down but just not at the fair & reasonable levels that we would all like to see it.
Just as a clarification (and an excuse to play with the new reply system), it wasn’t my idea.. the company I work for did it :)
Though it can be somewhat fraught with peril, management had been worried there wouldn’t be enough people taking it, but instead more then expected took it.. which resulted in some pretty serious “brain drain” (though they all left for retirement, not another company..)
@softwareengineer
“they’ll probably find a wiley way to cut domestic experienced higher pay workers to keep cheap H-1Bs”
H-1Bs at MSFT are paid just as well as the “experienced” domestic workers…in general though our engineers from other countries are more skilled than the ones from the US.
You seem to have a one track mind…somehow you make every post relate to the terror of the influx of the foreigner. I think the southpark “they took our jobs” episode was written with you in mind. =P
I agree with the other Ben. I came here on a h1b, and it did not save the company money to do so.
I understand people being frustrated about undocumented workers reducing pay for people, but the h1b program forces you to pay prevailing wage. Maybe some places abuse that, but at every place that I have seen pay is done by experience level, not by work status.
I’d rather see 10% laid off than a 10% reduction in salary. If 10% get laid off, it only affects 10% of the workforce (and hopefully the least productive of those 10%) so there is less chance of you being affected, especially if you work harder than those around you. Also, it allows those 10% that do get laid off to move on with their life, and maybe make that career change, or start that business that they’ve been dreaming about for years. If you cut everyone’s salary by 10%, you’re basically telling your workforce “your time is suddenly less valuable than it was yesterday, but we still expect you to do the same amount of work” which I think is more insulting than just getting rid of some dead weight in the company.
Would you rather a company use extra profits to give everyone a 10% raise or hire 10% more people?
10% raise may not be justified cause who knows how long the profits would last, but I’d vote for a one-time bonus of 10% of your salary.
Really don’t understand the logic behind why this pole is slanting the way it is… maybe the poll question would be better restated to: Would you rather your employer… Lay YOU off, or cut your salary by 10%. Would that change peoples votes?
How about a ten percent pay cut and a 10% cut of hours and responsibilities? When management sacks ten percent of the people doing the work, those who are “lucky” enough to stay get to do 2-3 jobs for no extra pay.
I wonder how many of the folks who voted for a 10% layoff voted that way because they are already in credit card debt and could not afford to lose 10% of that check? Too many Americans live far beyond their paychecks instead of saving 20% off the top, and living on the rest.
Families of 4 used to live in 750square foot houses. Now childless couples fill 1300sqft townhomes with furniture charged on credit cards. Happiness has declined as floor space has expanded.
(and hopefully the least productive of those 10%)
That’s how it should be, but that’s not really what happens. Politically weak departments and areas that were run unprofitably get cut – regardless of the individual workers. When the economy is growing, things like market share and revenue growth often trump profitability. When the economy turns down, the objectives change. What was highly productive before becomes a liability.
Off topic but man blogs are slowly going right back to the forum format aren’t they. The global reply was really the only thing that separates the two formats…
on topic, cutting wages is the right thing but employers will just take advantage and still do the layoffs afterward. Don’t kid yourself, employers are cleaning house and rolling back wages big time. Been at the company 10-12 years and make the big bucks- be worried and be smart- start looking around.
I’ve always preferred the nested style of comment discussion, which IMO is best implemented over on slashdot. If it wouldn’t be such a massive pain, I would totally migrate Seattle Bubble to slashcode. Their threaded discussion system rules.
imagine this seattle isn’t so special:
Metros With the Biggest Rent Drops:
Seattle-Bellevue-Everett, Wash.
Rank: 5
Rent drop: -3.5%
Q4 2008 rent change: -3.8%
Q4 2007 rent change: -0.3%
Effective rent: $1,161.60
Seattle, home of Boeing and Microsoft, has seen its apartment rents fall as the economy falters. The unemployment rate climbed to 5.6% in November 2008 compared to 3.7% in November 2007. The apartment vacancy rate jumped to 6% in the fourth quarter last year from 5.1% in the same period in 2007. Landlords on average are giving rent concessions of 1.8 weeks.
It seems to me the real estate cheer leaders sure have disappeared.
I constantly have to fight the urge to drop by our old pal Meshugy’s house and leave a Seattle Bubble business card in his door with “We miss you!” written on the back…
They’ve been replaced by a new generation that likes to talk about how we are headed for massive inflation so taking on lots of debt is just a smart strategy.
Cut the dead wood.
My employer did about 5% layoff, and it only cut out about 1/2 of the useless people, we really need another round.
And in general this recession has only cut out about 1/2 of the stupidity which was occurring prior to this recession. Capex is still viewed as being nearly free, focus is still not on hiring good people to do more with fewer heads.
I don’t think there is a simple answer to the question of lay-offs vs pay-cuts. Ultimately, companies should do whatever it takes to remain viable concerns. You have to examine whatever inneficiencies or above average costs you might have that make it difficult to compete.
If you really have a lot of people only working at part capacity, then it is STILL wasteful to keep them on staff even if they take a pay-cut. It is far better to keep a smaller number of people who are really occupied than masses of people milling around with little to do.
Likewise, even if all your staff is working flat out (on useful things), you can’t really afford to be paying them more than the prevailing wage. If you can hire equally competent people for considerably less then you are insane not to demand pay cuts from existing staff.
In some cases BOTH pay cuts and layoffs may be in order, it all depends on the individual circumstance of your business.
At the end of the day, the most important thing a business can do is to ensure that they are as profitable as possible. By ensuring they will continue to be a viable enterprise, businesses help both their staff and communities the most.
From today’s Seattle times, along with reports of increasing sales of homes,
“Iceland has been mired in crisis since the collapse of the country’s banks under the weight of debts amassed during years of rapid expansion. Inflation and unemployment have soared, and the krona currency has plummeted.”
HEY BEN AND OTHER BEN, ITS NOT JUST ME
Its an embarrassment to our American Government [it is for "We the People" you know] for MSFT to be insourcing employees during a recession/depression.
From Stein Report today:
“U.S. Sen. Chuck Grassley, R-Iowa, has sent a letter to Microsoft Chief Executive Steve Ballmer expressing concern over how the company may go about its layoffs. ‘I am concerned that Microsoft will be retaining foreign guest workers rather than similarly qualified American employees when it implements its layoff plan,’ Grassley said in the letter, posted to his Web site on Friday,” the Seattle Times reports. “The senator asked Ballmer for details on the jobs to be eliminated; how many are held by H-1B or other work-visa-program employees; how many are held by Americans and, of those positions, how many similar positions held by foreign guest workers are being retained; and how many H-1B or other work-visa-program workers Microsoft will retain when the layoff is complete.”
I know, you say the H-1Bs generally make the same money as experienced American engineers; of course I already clearly disproved that with written proof [you probably read it too]. But even if they did [they don't], what’s that got to do with laying off higher paid domestic experienced workers and replacing them with lower paid and younger extra foreign overpopulation?
I do admire your courage for admitting you’re H-1Bs, kudos for you there.
Here’s one for you Software Engineer: http://radioactiveliberty.com/im-not-xenophobic-i-hate-foreigners/
If 10% pay cuts over 10% layoffs became commonly accepted by employees, employers would surely abuse it. Why should they ever give raises when they can stay in a constant “pay cuts or layoffs, you choose” mode?
My experience with H1Bs is, you never talk about salary with them because whenever you did before, you were absolutely shocked at how little they were paid. Comparing notes with other US citizens, who were likewise shocked, is how I came to the conclusion that H1Bs are equivalent to indentured servants. I also tracked a former roommate of mine through the immigration process. Until he got his green card (i.e. until he was no longer locked-in to one employer) he was severely exploited.
Hey Euro. I tend to agree with Software Engineer on his views of the H1-B visas.
So let me ask you this. What if people born in the US started flying in to India or China for example and wanted a work visa, one that would replace a home-born worker? They would be laughed out of the place, right?
And I find it kind of ironic that back in time before WWII, that white folks were “colonising” places like India, China, Vietnam etc. Which I agree was wrong. But what happened after World War 2? With the exception of Hong Kong, the Europeans were EXPELLED and most of their influence was EXPELLED, because they wanted their culture back.
So you want to talk about American-born people & Xenophobia, just look at the history.
Or do you justify your beliefs by saying that we are racist? And how Microsoft needs these employees. So what if it takes them another 10 months to finish a project because they are “short-handed”. Its not the end of the world if it takes them a bit longer.
We just dont like our culture impeded on and told what was ok 25 years ago now could be offensive to somebody who wasnt born here. We dont like OVERPOPULATION either.
“So what if it takes them another 10 months to finish a project ”
If it’s good enough for Detroit, it’s good enough for Redmond!
My experience is entirely different like I said before Markor. I’m here because of my expertise, which cost me a few years of 70+ hour work weeks to build up. I’ve been a speaker on several international conferences, wrote a book and written several articles (not just blogs) on the topic. And I’m paid well, definitively according (slightly above) market average. Also, I have a good network of fellow software engineers, many of them H1-Bs and undoubtedly experts in their own field. Most of them (Europeans, Indians, Chinese, New Zealanders, …) came over here because they got an interesting job offer, where a good salary was only one of the factors.
I know of not a single instance of the slavery you are so eager to describe. I’m sure it exists, but it surely is not what H1-B is set up for, and I don’t understand what companies would gain by employing people like that. If the expertise doesn’t matter, why go through the hassle and responsibility of sponsoring, and if only the price matters, why not just offshore? The kind of H1-B worker I know and represent simply wouldn’t take a bad deal and would go somewhere where jobs are well paid and living conditions are good. Shocking as it may sound, there are plenty of countries in the world besides the US where life is good for skilled professionals.
so we are like iceland?
http://www.exchange-rates.org/Chart.aspx?iso_code=ISK&base_iso_code=USD&mode=G&filter=M
perhaps this is the problem
“the Europeans were EXPELLED and most of their influence was EXPELLED, because they wanted their culture back.”
I know, my grand parents and mother were kicked out of Indonesia after having lived there for several generations. I hope you’re not telling me you think that’s an example of how the world should work.
“So you want to talk about American-born people & Xenophobia, just look at the history.”
Yes, if you would do just that you would see that this country was build by immigrants. The poor and battered ones even. Catholic Irish and Italians, which had weird habits and accents and stuck together in their own ghettos threatening the American values. Turns out the US has been doing well because of it, whereas countries where xenophobia is big don’t do very well, do they?
“So what if it takes them another 10 months to finish a project because they are “short-handed”. Its not the end of the world if it takes them a bit longer.”
Well, MS being the big bad market leader might not be the best example, but many other companies actually need to be competitive in a globalized world. Yes, another 10 months and double the expenses for labour makes a difference.
“We just dont like our culture impeded on and told what was ok 25 years ago now could be offensive to somebody who wasnt born here.”
Oh, and would you be able to describe exactly what that culture is? An integral part of American culture is that it is a hotchpotch of immigrant influences, and an integral part of Culture is that it is constantly changes, whether that is because of outside influences, new generations, or new technology. Unless you want to keep your head stuck deep in the sand, deal with the new world, where borders matter less and less, cultures influence each other (and often for the better) and countries have built up mutual dependencies all over the place (which is one of the best securities against wars as you may know if you read your history books carefully).
“We dont like OVERPOPULATION either.”
Good news, I get from reliable sources that very soon people will start pouring out of King Country, making housing affordable again in the process! ;-)
The reason they don’t offshore exclusively is the same reason telecommuting is not commonplace: employers prefer face time.
To H1B workers from, say, Calcutta, sharing a studio apartment in the US might be such a step up that they don’t look for a better alternative.
kind of: http://www.exchange-rates.org/history/USD/EUR/G/180
Obviously the US is 1000 times the population of Iceland, but they show you can have 17% inflation at the same time as financial collapse and unemployment.
Other than the potential & actual hit to my pay, I’ve enjoyed the immigrant influx on the Eastside. Seems to me the intelligence level has gone up, and the restaurant choices have improved. I like the Indian culture; I’m even warming up to the idea of arranged marriages.
Euro, I am rather enjoying our barbs here. And would love to debate further, but I am not sure if this site is intended for that, but I guess The Tim will banish our comments if it is.
1. Are you or your family Indonesian? Or were you expelled because of the religious tension that has been going on there for the past 100 years. If not then yes I can to some degree justify their actions.
2. This country was built on Anglo Judeo-Christian values. Yes, they DID import blacks and to a smaller degree Chinese as slaves and It was WRONG. But was the U.S. doing horrible up into the 1960’s? Until then, immigration from other countries was VERY restricted. Or were was the US just being Xenophobic until the 1960’s?
3. I have slightly less of a problem with outsourcing as I do importing labor. I dont like it but if companies choose to outsource to speed up labor, then they should move their headquarters there as well.
4. Once again. Anglo Judeo-Christian culture is under attack. We have Hispanic politicians telling “their people” to have as many babies as possible because the white baby boomers are dying out. We have immigrants here on all kinds of temporary visas who have children just so they can stay here(yes this occurs with the H1-Bs here in Seattle). Most Americans DID NOT ask for “outside influences”, politicians dumped them upon us and brainwashed us into political correctness.
Point is, there were no Muslims, Sikhs or Hindus, etc. on the Mayflower. And virtually all the ships afterward until the 1960’s. So what was horribly wrong with our country until then….At least answer that one if nothing else.
5. What “sources” keep track of potential exoduses out of King County? And where will they go? And what people?
Yes, Renter of Bellevue, I agree we’re done here. We have completely different views of the world. Good luck with yours.
Well Euro, I’ll assume you had no intelligent response. I never said we were done, so there was nothing to agree with.
Maybe you know I am right about what I am saying so you couldnt respond to my last post.
And while your grandparents were being expelled from a Indonesia mine fought in WWII to provide a country for my family to have a life here. Not to compete with immigrants for jobs, housing, affordable amenities, etc.
Hmm. Racism is alive and well on SeattleBubble.
I might take a 10% pay cut if it meant 10% fewer hours at work. I have a feeling that isn’t what would happen though.
Next thing you know, one of those dang muslim Indonesian immigrants is going to want to be President.
Renters of Bellevue, My family fought during the Revolutionary war. If yours didn’t please leave.
Further, my wife is Native American and she keeps claiming that here land was stolen from her. She really likes that you are here. We are almost all immigrants you knucklehead.
Iceland is nothing but a “California Inland empire” nation. All the economic growth in the past few years was sustained solely by a crazy housing boom. All economic activity in one way or another was related to the crazy real estate prices.
When the bubble exploded, the banks had nothing (and no, they could not sweep it under the carpet like here in the states since this was all over the nation and was affecting more than 50% of the population).
Jon you can dream all you want, but you are already seeing something similar in San bernandino and surrounding exhurbs of LA where whole towns have gone bust in the wake of the bubble mania. Just pluck one of those counties from that region and put it in Europe and voila! I give you Iceland.
hardly the same. The dollar has moved from a monthly average of 0.68 to 0.75 against the euro in 12 months. that is a 10% decline, and it has oscilatted – hasn’t been a secular trend . Meanhwhile, in the same time period the Krona has dropped from 0.015 to 0.00075 ISK/USD. That is drop of 50% and the trend has only gone one way.
Iceland imports everything but ice and fish. Their currency failed. of course they are going to have inflation.
The comments have reached a new low with this post. And for the record, the country was founded by the founding fathers using enlightenment ideas of liberty and justice, not the religious ideals of the Puritans on the Mayflower.
Oh sigh. You know, “other people are worse” doesn’t really excuse a selfish attitude like that. “Most Americans DID NOT ask for ‘outside influences’” – they’re not ‘outside influences’, they’re hard-working people in search of a better life. They didn’t ask to be born in a country with a crappy economy either, but they did the best they could, which is more than can be said than Americans infected with entitlement gangrene. If what you espouse is “Anglo Judeo-Christian culture”, then I will be very happy to see it come under attack and disappear completely.
You forgot to introduce the quoted text with “proof”!
BTW, I have never met an H1-B person that claimed they proved anything by pointing me to an opinionated article. You might be “proving” that they are smarter than an American SWE.
I am sure the Native Americans can really relate.
Imagine a nation of immigrants where some of the immigrants don’t like immigrants. Odd.
While we are on the topic of immigration, its human nature that people always want things to remain status quo especially, if they are the ones who are being helped by the status quo.
Immigration, especially economic immigration happens all the time. I was very surprised (and then once I read this it seemed logical) that people migrate all the time from the poorest regions of the world (sub saharan africa, bangladesh, burma for instance) to the not so poor nations (egypt, morocco, india, malaysia etc). And so the article was about someone who made a living hauling goods on a wooden cart and was complaining about the “illegal immigrants” who were doing it or cheaper.
you feel that isn’t what would happen because things have not gotten bad enough yet for the majority of workers to unite and negotiate terms rather than have them dictated by management.
citizens are still content to sit back and hope the politicians can spend our way out of this.
yeah but just reading this thread this morning is getting anoying. There are now scores of little private conversations going on. It really does feel more like a disorganized forum.
I would have preferred a spell check :-_)
Wow, that’s a lot of frustration.
First off, the US didn’t ‘import’ blacks, slave ships went to Africa and captured people and brought them back to America in chains and Americans bought and sold them to each other, each forcing them to do whatever labor or other twisted whim they wanted until the slave died. Your saying was ‘wrong’ is a bit of an understatement. I’m white by the way.
‘Anglo Judeo-Christian culture’, No Muslims on the Mayflower (I doubt you truely know if this is true or not) or any ships until after 1960 (this is definately not true). Is someone feeding you this stuff or is this original?
Get a grip, this stuff is making you sound foolish.
Man this thread went to hell, didn’t it ;-)
To get back to the original question:
I’m surprised no one mentioned the obvious. The answer depends on whether you are part of the 10% that is getting laid off.
I would love a kill file.
I think it unlikely for a company to ask to reduce salary 10% and allow one to work 10% less. The overhead per employee is too expensive. It would make more fiscal sense to allow you to keep your salary and ask you to work 10% more. Thus allowing jobs to be trimmed.
In discussing our forefathers wants, some of our grandparents probably preferred the greeting below, upon arrival to this country.
“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me.
I lift my lamp beside the golden door.”
Actually, the view on immigration is essentially the same as the poll question.
Would you rather your country expel 10% of the population, or reduce average income by 10%?
Of course the difference is if you expel workers, then economy goes down as well, especially if you expel the ones that are working the hardest and being paid the least.
This one actually is relevant to the discussion
In the UK, government sources say shorter hours would be preferable to mass unemployment: Britain is facing return of three-day week
I’d prefer my company lay off 10%.
Maybe that’s because I’m an H1B who is already paid peanuts and is sharing “sharing a studio apartment” with 3 other families and desperately expecting another anchor child :-))
I know I won’t get laid off because my employer would sure prefer to keep such an “obedient and indentured servant”. LOL.
Seriously though – is this just trolling or people honestly believe all this rubbish?
Good post. I wonder who the Native Americans displaced. Some of the Carribean islands had multiple waves of immigrants, each killing off the last, before the white man got there.
They will have a lot more time to spend with their families, but they might not be able to feed them on granite counter tops. Which would you take, the family, or the granite?