Not being a business school graduate, I am uncertain where the terms “outsourcing” and “downsizing” originated. They are somewhat neutral but hide a good deal of misery. I can say however that I have lived through both and they continue to be the nasty underside of largecorp and most likely will be a force in their demise.
Downsizing means mass firings. The fact downsizing occurs is frequently the result of poor management of the Senior Management Team. Had they been managing largecorp properly there would be no need for downsizing. The excuse most often pointed to is “rising expenditures” which reduce profits and get the analysts all lathered up. The goal is to become “more competitive”.
I have been through mass culls by CRAP and Up Up and Away where thousands were fired. The untold and incalculable misery caused by downsizing is massive. It hurts both victims, spouses, the family and the communities they live in. It shatters the confidence of the remaining employees as they wait bathed in fear and stress for their heads to be on the chopping block during the inevitable next round of downsizing. Further stress is heaped upon them as someone must fill in for the tasks formerly done by the victims.
A companion to downsizing is salary freezes, a frenzy of activity over cutting expenses and often hiring freezes. All these compound the misery of the survivors.
Strangely the SMT incentive payments and enhanced pension benefits keep rolling in and increasing at that!
Then a few years later hopefully profits increase and hiring freezes are maintained as why not keep the remaining employees working to the bone? Work them until they break like mules.
I think a few wise employees realize that the goal of largecorp is to have artificial intelligence reduce as many employees as possible, so downsizing will continue until machines and computers replace employees and create a mass of unemployed and a small group of wealthy senior management types. Social unrest will increase, and a social revolution will take down largecorp and its fat cats or alternatively the revolution will be defeated and the financial tyranny of largecorp will be augmented by political tyranny.
Largecorp creates the seeds of its downfall as the victims see largecorp for what it is. Any trust and respect for all largecorps by its employees and now the general public is transformed into a fiery ball of cynicism and disgust aimed right back at largecorp. Many of the victims of largecorp do end up working for another largecorp but they become actors playing a role solely for the pay. Loyalty is but a joke. Dislike and distrust for the SMT runs rampant. Retirement is an escape into freedom from the tyranny of largecorp ad the welcome bliss of a government pension income below the poverty line.
Outsourcing is more of a silent killer unless it results in downsizing. However, in many cases it means not hiring a local employee but instead hiring a dirt-cheap foreign employee. The central idea is the same and that is to reduce costs. Pay a Mexican assembly line worker $2 an hour which is much cheaper than the $35 an hour the unionized Canadian worker is paid not to mention a generous benefit package tacked onto that nice hourly wage.
In the long run increasing outsourcing raises the standard of living of the foreign workers until at a point they become too expensive for largecorp who then looks to source a new cheaper labour market. As India becomes too expensive the outsourcing then shifts to China or the Philippines. At one point will there be no cheap labour markets so that outsourcing is no longer useful to largecorp?
I note former President Trump’s attempt at bringing back jobs to the United States. Outsourcing is becoming a big American political theme. I recall the Governor of New York and the Mayor of New York City praising the CEO of Up Up and Away New York for being a big New York State employer while it was setting up huge outsourcing operations in Warsaw, Shanghai, Mumbai and Punnai. And when artificial intelligence replaces any need for employees this will include outsourced employees. Many politicians are about as stupid and incapable of management just like the SMT of a largecorp.
It is probably too late to do anything about stopping downsizing and outsourcing. I am not sure what Bully Trump and his successors could do to stop the bleeding? About the only solution I can think of is establishing a punitive tax regime for largecorp that downsize and outsource and a favourable one for largecorps that refrain from outsourcing and downsizing. The result is a more impoverished Third World that will not doubt lead to political and religious radicalization threatening the New American Dream.
Now in Up Up and Away New York’s case its first outsourcing location was Canada! The Canadian dollar was weak and the Toronto workplace was highly educated and culturally and linguistically Canada was very similar to the United States.800 jobs in Toronto were created servicing clients throughout the globe.
Some outsourcing is necessary as many countries in which Up Up and Away America operated in did not have English as their first language, so some local servicing and administrative type employees were required. Additionally, some legislation in these jurisdictions required a local corporation to be set up and locally licensed employees to provide regulated services to clients.
Yes I was downsized by CRAP as my gut feeling was , which turned out to be correct, they were selling my division to a competitor and close to 100 of my fellow employees followed me out the door. I remember being humiliated and very angry. Although if it were to happen again just give me my severance package and good riddance. Of course, may Felicity Poker and her henchman at Ooze & Ooze, Brian Cochon, rot in hell. And I am not going to tell you what I plan to do on their gravestones.