November 28, 2005

Question of the Day

In response to this bit of economic news:

... This morning, Merck (nyse: MRK - news - people ) announced plans to cut 7,000 jobs, or 11% of its workforce, in an effort to save a total of between $3.5 billion and $4 billion through 2010. ...

... the financial wizards looking down from on high have put the spotlight on the people we should all really be concerned for, the poor, put-upon shareholders. And it's understandable, because really, we all feel their pain:

...Prudential's Anderson, for one, sees Merck as "cash-rich, earnings-poor company for many years even with restructuring." On the conference call, he asked Merck if it should consider a share buyback or a dividend increase. The answer to the question came from Merck Chief Financial Officer Judy Lewent, not Clark, and basically reiterated Merck's continued commitment to its dividend.

But giving money back to investors directly might be the best use for Merck's $14 billion in cash. ...

These jobs going away are probably pretty good ones. A mix of white and blue collar jobs, full time with benefits all the way down to the secretaries and janitors. A lot of these workers will probably be able to find other work, but chances are that the next stop on the way for many is a pathetic McJob that they'll be overqualified for, leaving someone lower down the scale with fewer prospects.

But hey, how about them dividends? I'm certain that the dividendees will go out at once and use their windfall to create another 7,000 or more jobs equivalent in nature to those lost, because that's what the market is all about.

Posted by natasha at November 28, 2005 09:56 AM | Economy | Technorati links |

Think how much they would save if they laid off everyone. The mind boggles!

More clueless management - time for them to go.

Posted by: PhilW at November 28, 2005 04:36 PM

Wow, talk about rant mode.

Of course...

Wait, they're saving $4B in paychecks while they have $14B in reserves?

How does garroting the workforce which provides the results for the company help at all?

Nevermind Merck isn't on of the most top-heavy of companies. Well, it will be after this...

Posted by: Crissa at November 28, 2005 06:27 PM

Man, there should be a place for this sort of rant. I always feel so alone when looking at this sort of stupidity and wondering at it out loud...

Posted by: Crissa at November 28, 2005 06:29 PM


Posted by: sfhg at November 28, 2005 11:33 PM

So, what was the question?

Posted by: Rick at November 29, 2005 05:05 AM

It's all about corporate profits, and capitalists cheer when companies lay people off as long as it means more money in their own pockets.

The steady erosion of higher paying jobs and their replacement with lesser jobs is reflected by the fact that the biggest employer in the US used to be GM, with its legions of unionized employees. Now, the biggest employer is Wal-Mart, which notoriously underpays its employees. This is the trend of the economic system in America.

Posted by: Haikuist at November 29, 2005 09:07 AM