This article, which I came across while researching the growth of social media, says something important about the modern capitalist ethos.
In response to declining revenues in the first quarter of 2009, Google has “imposed severe cost controls and slashed expenses”. These actions are praised as mature and rational. The very next paragraph then tells us that the clearest sign of change is a reduction in Google’s workforce. The implication is that reducing the workforce is mature and rational. Of course, we are in a recession and “no company is recession-proof”.
But hang on, Google isn’t losing money, their rate of growth has simply declined; they are still growing and still making gads of money, netting $1.4 billion in the first three months of this year to be exact. What’s more, they have roughly $28 billion in cash and other liquid assets and negligible debt. They are in great shape!
I will grant you that the layoffs were modest but my point is about the underlying ethos at play here: that it is mature and rational to lay people off during a recession, no matter what. Google can afford those 58 jobs – they cut them because that is what is expected of a mature and rational company. But in a climate where savings are at an all time low, debt at an all time high and people more vulnerable than ever, the number one priority ought to be maximum employment. To me, these praiseworthy measures are reactionary and irrational.
Nearer the end of the article an analyst quotes: “Clearly the upside came from severe cost controls.” Clearly continued revenue growth and a hoard of cash are no longer considered upsides – more and more and more is the only goal.
Well said Ash.
As you infer wouldn’t a healthy company like Google be more responsible be staying with the same number of employees or even adding employees? Therefore, assisting the economy to get back on its feet by adding to the employment pool?
My perspective on all this is that the current capital system has done an excellent job of figuring out ways of pulling wealth from the past and the future. And even celebrating those who figure out new and better ways of doing this. Some day, and probably not the current generation are going to have to figure out ways of pulling wealth back to pay the environmental bills we will have in the future.