Wednesday, November 26, 2008

Don't Bank On These Guys

I’ve been railing against idiot bankers for years now. Wall Street was driven by greed, dishonesty, and dishonor. The salaries paid were obscene and the arrogance amazing. Watching this latest meltdown from neighboring TriBeCa has been horrendous. I don’t really care what happens to the bankers. In fact, I’m more than a little pissed that so many of them have walked away with fat cat bonuses over the last three years and we found no way to get that money back.

What depresses me is what happens to the average person. Many employees at Saatchi & Saatchi have seen their 401K retirement funds decimated by the greed, stupidity, and arrogance of these so-called 'Masters of the Universe'. And the worst is yet to come. Management around the world are taking radical cost actions to survive. In my job, I get to speak to CEOs all over the world and no matter what business they are in or in what geography, when you ask them this question, “What’s your most important resource?”, they always have one answer - their people. But at the first hint of trouble, the first thing that many of them do is get rid of them, indiscriminately and usually starting with the innocent in the middle and at the bottom, rather than at the top where in most instances the blame lies.

Last week in the U.S., mass layoffs reached their highest level since the recession month following the September 11 attack. Unemployment hit 6.5% in October, the highest rate since 1994. No industry is immune. Chrysler laid off 6,825 people last month, 25% of their workforce. The once mighty Goldman Sachs laid off 3,250 people, 10% of their workforce. Poster child Yahoo laid off 1,500 people, 10% of their workforce. And Merck, once all powerful in the pharma world, laid off 7,200 people, or 12% of their workforce.

My view is that the role of business is to make the world a better place for everyone. The way it does this is through innovation and ideas that create jobs, not by highfalutin, fancy-named pseudo technological financial instruments which destroy wealth, hope, and dreams.