A major trend from the current recession has been a continued wave of layoffs and outsourcing and as we all have seen in the past two years, more and more companies around the world are focusing on cutting on spending that mainly results in a reduction in workforce.
As soon as there is a revenue drop or even a prediction we see major layoffs being announced. This has been a trend in the last many months and continues this year as well. Here is a short compilation of how companies have fared and used strategic tactics to keep afloat and grow during recession.
Companies making tough choices to stimulate growth during recession
Firms focused on rapid growth are blending defensive tactics like staff cuts with offensive measures in their efforts to pass their competitors, according to a new report from the Economist Intelligence Unit.In an economic downturn as steep as the current recession, companies tend to hunker down, cut costs and seek efficiencies. But firms focused on rapid growth are blending these defensive tactics with offensive measures in their efforts to pass their competitors.
This is the main finding of a new research report from the Economist Intelligence Unit (EIU), Management magnified: Strategies for revenue growth in an economic downturn, sponsored by SAS. The research is part of a three-pronged analysis of management strategies that includes an examination of decision making in a recession and an assessment of executives’ perceptions of the link between sustainability and growth.
Companies will continue to face challenges in the near term. The EIU forecasts a slow recovery for the global economy through 2013, although performance will vary by region and industry. The economies of North America and Western Europe will slowly expand, not topping 2 percent GDP growth until 2013. Latin America and the transition economies in Central and Eastern Europe will pick up in 2011, and the Middle East and North Africa will experience a somewhat stronger rebound, starting in 2010. Emerging Asia will be the fastest growing region in 2010 – 13, led by India and China.
Read on ….
Some snippets from the last year:
HP revenue drops in tough climate
Computer industry bellwether Hewlett-Packard Co. reported a 3% drop in revenue as its major lines of business continued to be hammered by the global recession.
The company also became the latest technology vendor to resort to layoffs in order to cut costs. Over the next 12 months, HP will lay off about 2% of its work force, or about 6,000 employees, HP Chief Financial Officer Cathie Lesjak said during a conference call with financial analysts Tuesday. HP employs 321,000 worldwide.
Another major impact comes from outsourcing jobs to lower spending.
Another report from Computerworld says:
IBM, which is cutting thousands of employees in a move that it has refrained from describing as a layoff, is offering affected workers what it calls Project Match. The employees who can take advantage of the offer include those who have been “notified of separation from IBM U.S. or Canada” and “are willing to work on local terms and conditions,” the company said.
U.S. workers have long taken jobs in other countries to get promotions or for the experience of living overseas, but corporate expats are typically paid on a U.S. wage scale. IBM said that as part of Project Match, it is offering workers financial aid to offset moving costs, assistance with visas “and other support to help ease the transition of an international move.” But their wages may be similar to the pay of employees in the countries to which they’re moving.
Changes in policies and long-term plans might be in place for many organizations but what they must understand that even during the tough times the most important asset of any company is its people. They must ensure that employees do not live under the fear of layoffs or termination. It is extremely difficult to thrive and be productive if you fear a sword hanging over your head. This year the focus must shift towards retaining their talent, recognizing hard working / valuable employees and appropriate changes in marketing strategies to ensure a decent ROI.