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Friday, February 7, 2025
Government Downsizing
Sunday, December 8, 2024
Dr. Bhattacharya, Covid, Sweden, and the Future
The nomination of Dr. Jay Bhattacharya to head up NIH reminds me that there was one country, Sweden, that tried to follow the principles outlined in the Great Barrington Declaration. That is, it tried to protect the elderly while allowing most other people to carry out their day to day activities unimpeded.
How did that work out? I think the results were mixed. Early in the pandemic, 2020, Sweden had over 1½ times the number of excess deaths(that is, deaths from all causes, including Covid) proportionate to the population than did other Scandinavia countries (Denmark, Finland, and Norway). This is to be expected, as few measures were taken in Sweden to reduce the incidence of the disease in the general population.
However in 2022 with the introduction of vaccination, Sweden’s excess death rate was about ½ the rate in the remaining Scandinavian countries. Sweden reduced its excess death rate while the rate in the other Scandinavian countries increased. This is what the Great Barrington Declaration predicted: that lock-downs and other restrictions at the front end of the epidemic would result in additional excess deaths when the epidemic was over. It is too early to judge whether this long tail will continue.
Finally, Covid deaths in Sweden, as opposed to excess deaths from all causes, over the whole course of the epidemic from 2020 to November 2024 showed Sweden doing badly: over 1½ times as many Covid deaths, proportionate to the population, as in the other Scandinavian countries.
We should note that Scandinavia as a whole, including Sweden, did better than many other European countries and much, much better than the USA where Covid death rates were higher than those in Scandinavia (leaving out Sweden). At the height of the pandemic, states controlled by Republicans had higher excess death rates than those controlled by Democrats.
As the threat of a new pandemic (a bird flu crossover to humans) approaches, we need to decide carefully which restriction over our behavior are necessary and which can be ignored. We must follow the data painfully gained from the recent Covid pandemic.
Sunday, December 1, 2024
Friday, November 1, 2024
Tuesday, December 12, 2023
Friday, March 24, 2023
Downsizing 2022 style.
You can find it here: Boston Business Journal: Downsizing.2022 style</p>
In case you are blocked by the firewall, here is what I wrote:
It is never a good time to get laid-off, the shock of being fired is traumatic. It is probably not assuaged by knowing that 10,000 others are being laid off at the same time, though it may be comforting to know that you are being forced into a labor market with a 3.5% unemployment rate as opposed to the 6% rate of the early 1990's when downsizing became the managerial fad of the day. For those laid off by firms in the high technology industries (Amazon, Facebook (META), Microsoft. It is also good to know that there is great demand for high technology workers in low technology firms as they adjust to the new realities of an on-line economy
In the 1990's when the first waves of downsizing occurred, it was clear that not many firms enjoyed the long term cost reductions that motivated lay-off in the first place – one estimate (Wyatt Company, now Watson-Wyatt) suggested that about 25% of downsizing forms benefitted. This because firms went about it by across the board cuts which are less effective than targeted cuts and by failing to consult employees which led to a failure to understand where the flab in the company ended and where bone and muscle began.
With such a low success rate, firms should consider alternatives before choosing layoffs: reduce or eliminate bonuses; in these post-pandemic days, reduce facilities costs by moving to at home work; and temporarily cut hours and cut wages and allow permanent downsizing to occur over time through attrition. This is much less disruptive to the firm which might otherwise suffer loss of important tacit knowledge, as seemed to happen in the disastrous, chaotic Twitter reorganization after the Musk takeover.
In
undertaking downsizing, I think some firms may have learned the lessons
proposed by organizational scholars, Wayne Cascio and Kim Cameron, for
successful downsizing that they discovered after the downsizing events of the
1990's. There were two major findings:
$ Downsizing
should be undertaken in the service of a strategic shift; units compatible with
the new strategy should be reinforced, units lacking such compatibility should
be downsized.
$ Top management should share the pain by taking significant salary reductions for the year(s) layoffs were occurring.
When we look at the downsizing decisions of the major technology companies, we find that the first lesson has been incorporated – at least in what the CEO’s say to their employees and the public.
At Microsoft, CEO, Satya Nadlia, announced the layoff of 10,000 employees (about 5% of the workforce). She explicitly said “we will continue to invest in strategic areas for the future, meaning we are allocating both our capital and talent to areas of secular growth and long term competitiveness for the company while divesting in other areas.” She did not explain which areas would grow and which would shrink.
At Facebook, CEO, Mark Zuckerberg, announced a layoff of 13% of the employees (about 11,000 employees). Again he is explicit: “We’ve shifted more of our resources onto a smaller number of high priority growth areas - like our AI discovery engine, our ads and business platforms, and our long term for the metaverse.”
At Amazon, CEO, Andy Jassy, announced a layoff of 18,000 people (about 1% of the workforce). . He was much less explicit about a new strategic direction, but he did say where the cuts would be focused: initially in the Devices and Books businesses (with a voluntary buyout program in Human Resources; voluntary buyout programs are the worst way of downsizing; the most effective employees are those most likely to take the buyout) followed by a second required round in Stores and Human Resources (PTX).
None of these downsizing companies announced that members of the top management team would share the pain by taking salary reductions.
Goldman-Sachs seems to have partially learned both lessons. Although it did not announce areas which it would reinforce, it did target its cuts in the investment management and global markets divisions. The CEO, David Solomon ,shared the pain by taking a pay cut from about $37 million to $25 million. In addition, they minimized the number of layoffs by cutting bonuses to junior employees from $95,000 to about $12,500.
So 30 years on from the coining of the term downsizing, some firms have
learned from the efforts of management researchers. They have improved how they
carry out downsizing, but they have not learned the bigger lesson: it is better
not to downsize at all.
Tuesday, July 5, 2022
Wednesday, June 1, 2022
Friday, May 21, 2021
Thursday, October 22, 2020
Fresh Pond: Here I come.
Piece in Cambridge Chronicle https://cambridge.wickedlocal.com/news/20201029/guest-column-fresh-pond-here-i-come