"Industry Standard" Paycuts in IT? 1144
noGarnishMe! asks: "I was just reading about a Chicago-based company that has told all its employees earning over $60K/year that they will have to accept a 50% percent paycut for the month of May. This cut might be necessary in these times but keep in mind that the bozos in senior management just finished buying up several failing companies and paying some large bonuses to themselves. The memo announcing the cut is here. This cut, coming in such large chunk and in May, seems like a draconian shot to boost the 2d quarter financials. True, the annual paycut of 3.8% is modest but it ignores that fact that many folks won't be able to pay their May bills with only half their salary. I know that many of us have been through rough times these past 18 months and so I ask, what has been the approach at your company?" There are graceful and non-graceful ways for a company to handle a lack of cash flow. In the scramble for survival, especially in an economic downturn, many companies are caught off-guard and have to show their shareholders that they are doing something to get the company back on the road to profitability (which seems to be the issue, here). In many of these cases, the group most affected by such changes are the employees. It would be interesting to note how many of you have gone through this before and what you had to do to survive the shortfall.
hmmmm (Score:3, Funny)
Re:hmmmm (Score:5, Insightful)
BTW, anyone who is earning that kind of wage and still living from paycheck to paycheck is, well, a fscking idiot. There are families that earn $30k/year on a single salary with children and still save money. More to the point, if you're working in a high tech job right now and don't have an appreciable amount of cash in an "oh shit" fund, you're going to find out the hard way what a bad idea that is.
Having 3-6 months of living money (rent/mortgage, utilities, food, etc) in liquid savings (CDs are ok if done wisely, money market, savings acct, etc. but NOT stocks or mutual funds) is really something people should do. You can scoff, but when you suddenly find yourself unemployed, it's the people with these funds that are going to be fine and able to focus on finding a new job. The people without them will be visiting bankruptcy court.
Re:hmmmm (Score:4, Interesting)
Re:hmmmm (Score:3, Insightful)
~C
Re:hmmmm (Score:3, Insightful)
Nope, not quite true. If you are having money trouble, the *last* thing to pay off is the credit card company. Credit cards are unsecured loans, which means the most they can do is call and harass you and mark your credit. First thing you do is eat. Second thing you do is pay your house ( a secured loan --you don't pay, they take your house ), third thing is pay your car loan ( how else are you going to get to work ). Then, and only then, pay your credit cards. Call the credit card company and tell them you are having a hard time, and please stop calling. They will stop calling, and may lower your rates if you make minimum payments.
This is not the situation I'd encourage anyone to get into, but if you are desperate, this is what you can do to protect yourself and your livelyhood.
On the next technology boom, don't put yourself in this horrible, stressful, humiliating position of needing to choose "Who should I pay next?" when the bubble breaks.
Don't come off saying "the 18% credit card interest will cost you more in the long run". Paying the credit card company last is for people who would go hungry and homeless before they miss a credit card bill. Put your priorities into perspective.
Re:hmmmm (Score:3, Insightful)
Re:hmmmm (Score:5, Insightful)
BTW, anyone who is earning that kind of wage and still living from paycheck to paycheck is, well, a fscking idiot.
I resent that. Yes, I was an idiot (back in college), racking up a lot of credit card debt. I now find myself paying off all of that, plus a hefty student loan to boot. I do quite well for myself (not $60K, to be sure), but quite frankly, the minimum monthly payments on my outstanding debts swallow just about every penny I take home (well, that which isn't taken by rent, utilities, etc.).
Your advice is definitely sound, and I'm working on building up my rainy-day fund, but it's going to take a while, and meantime, I'm vulnerable.
All I'm trying to say is, some of us are no longer idiots, but still manage to find ourselves in this position.
Same boat, captain. (Score:3, Insightful)
All I'm trying to say is, some of us are no longer idiots, but still manage to find ourselves in this position.
Wow. I could not have said that better myself. There are many of us under 30 yrs old that have old credit card debt with student loans that are trying to get that stuff paid off whilst working on a rainy day fund...
I too am doing well, I too was way too stupid with credit cards when I was 18. I am working on getting that debt taken care of so I can save for the future but it freaks me out to think of how vulnerable I am.
Oh, and as for how companies are dealing with the poor economy... my company has not paid us on-time since December. You see, we are on a monthly pay schedule (one big check on the 1st of every month) which requires good budgeting to get through the month okay. Missing that by a few days can be rough, but manageable. However, this does not work too well when you are paid 15 days late, and really sucks when you are paid 30+ days late. I have not been paid for March, and I should be paid for April this week but that is not happening anytime soon. (Ramen noodles ROCK!)
So, I guess I have to start calling lawyers to see if there is any legal action that I can take... anyone happen to have had a similar experience and have advise??
late paychecks (Score:3, Informative)
Re:Same boat, captain. (Score:3, Informative)
Re:hmmmm (Score:3, Funny)
1. A foolish or stupid person.
2. A person of profound mental retardation having a mental age below three years and generally being unable to learn connected speech or guard against common dangers. The term belongs to a classification system no longer in use and is now considered offensive.
i'de say completely blowing your middle income salary because: 1) you don't know how to manage money, 2) can't fathom planning for the future, and 3) maybe believe that this awesome internet/technology boom is going to last 4-ever certainly qualifies for the first definition. the second definition is questionable.
Re:hmmmm (Score:3, Funny)
Or maybe that's ass. Damn, I should start writing these things down.
Re:hmmmm (Score:3, Interesting)
i have lost my job and have been searching for over 3 months. i'm a newbie on the bench from other accounts i read. the market for software developers is VERY tight these days. both of my neighbors are also umeployed and unable to find work, and neither is in the technology sector.
on a side note. if the job crunch is all about supply and demand, and there's an abundance of supply, then why is the H1-B program still continuing? this program was created to help fill supply for an over demand a few years back specifically in the technology sector.
Re:hmmmm (Score:3)
I'll tell you all something, you can budget and budget and budget, but shit will happen. The best advice I can give anybody is 'have a fallback plan in case you have to leave where you live.' In my case, I have family and friends I could stay with. If I lost my job, I'd probably have to wait about 4 months to get another one. Though I do have money saved up (barely) to pay the bills until then, I know what'll happen. The car will break down. I'll need dental work that I'm no longer insured for. And my girlfriend's birthday will come up. I think that I'd be able to move in with somebody I know, keep rent down. I even have plans in place to reimburse that person for when I do get a job for their time.
That's just me, of course. But I don't think you can ever have enough in your savings account to deal with unemployment for very long.
Re:hmmmm (Score:3, Insightful)
Oh GAWD! Take some responsibility? "More money than they were capable of managing?" Give me a break. You were perfectly capable of managing your money. If you are smart enough to hold down a job, you are smart enough to do the addition and subtraction necessary to save more than you spend.
You didn't WANT to manage your money. You were perfectly capable.
That doesn't mean we^H^H^H they're idiots. Just that they're still figuring this whole "money" thing out. In a situation like that, it's harder than you'd think to save for a rainy day.
Sorry, it does mean you are an idiot. It is not hard to figure out the "money" thing. If you are ignorant of specifics (different types of investments and so on) there are plenty of books on the subject, and you can even hire people to help you manage your money. You were perfectly capable, and it wasn't that hard. You just didn't WANT to.
Re:hmmmm (Score:3, Informative)
It is not hard to figure out the "money" thing.
Maybe so. But you'd be surprised at just how insufficiently educated most people are about personal finance.
Many people learn from their parents, who, chances are, are among the 90% of the population that are debtors rather than creditors.
It's kind of like parenting skills. It only takes half a brain and some willingness to invest some effort in learning how to be a parent in order to be a good one, but most people just "wing it" and tend to pass on a comparable ratio of personal dysfunctional habits to their children.
You just didn't WANT to.
More like, they just didn't think it was important to learn how to properly manage personal finances.
Well, it's important.
It's a hard lesson to learn by way of severe salaray reduction, but it will be good lesson.
Apart from the necessity of saving 3-6 months salary as an emergency contingency fund, they'll probably also start paying attention to a few other basics, such as not paying credit card interest, saving for kid's college, and really saving heavily for retirement because actual social security benefits are going to be paltry.
Re:hmmmm (Score:3, Insightful)
Exactly. While the above is certainly not a good excuse, it's probably by far the most common reason people get into trouble financially. I'm definitely in that group.
The one thing I really wish I'd done differently was to learn more about personal finance, and more importantly, the consequences of poor financial management. I can't blame my parents - they always bugged me to save, don't spend so much, be smart, etc. I didn't listen when I was growing up, and because I had no real responsibility then, I saw no negative consequences. I spent my allowance like there was no tomorrow and enjoyed my youth.
I got out of college 6 years ago and landed a good job making nearly $40k. All of a sudden I had a hefty, steady income with lots to spare after splitting living expenses with a couple of roommates. I bought an expensive vehicle, a few nice guitars and music studio equipment, computer toys, went out to eat a lot, etc. My mentality at the time was basically that I was young, it was early in my life, and I'd have plenty of time to save later on. Plus, in 5 or 6 years I'd be making a lot more money and would have no trouble paying everything off. I never thought about saving for retirement, to buy a house, having a cushion for hard times, etc.
I suppose I've been lucky. I haven't gotten laid off or anything, so I've got it pretty good compared to many. But 6 years later my salary is almost exactly double what I started with, and I'm just now climbing out of credit card debt. I live in a small one bedroom apartment with two other people, drive the same vehicle and have no cushion. About 8 months ago I moved in here to save money and aggressively pay off my debt. I've managed to knock off about $12k, with another $4k to go. I'd be done by now if I didn't have a wedding in another month, but it'll be a couple months after that before I'm down to $0. Then we start saving for a cushion and a down payment on a house. We'll probably buy our first house in mid to late '03 depending on how things go.
About a year ago, I realized that if I had been just a little smarter with my money, I could already own that house. Not only that, but I could probably still own all the toys and gadgets I've bought, I just would have had to wait until I could afford them instead of buying them when I couldn't. A $3000 guitar is a much bigger deal when you make $40k than it is when you make $80k.
Back to the point... I really wish my high school or college had had a good course on personal finance. If I had really learned that being irresponsible early would have me paying for it years later, maybe I would have acted differently. Instead I just "winged it," as you say, and assumed everything would work out automatically. I figured I was ok as long as I always made at least the minimum payments on all my debts.
Stupid, but after reading this thread I'm glad to see I'm not alone. ;-)
Re:That's a good one. (Score:3, Interesting)
This does make sense to me.
Back in BC* I made less money, but lived well below my means. While I owned my own house, the mortgage payment was ridiculously low, car payment same, nothing to do but play and buy my spouse expensive gifts. Spouse bought same.
We did save. We're not complete...erm...idiots. But we had more money, fewer obligations, and therefore, we spent some of it like fools.
I don't know that this kind of spending is the mark of the young, childless and well-off. I work with people over age 45 with older children who still live paycheck to paycheck because of their SUVs and DVD collections. Some folks never learn.
You've at least seen the light. Keep digging yourself out. Then you'll have the best of all worlds, money now, money later, early retirement.
sweeeeet...early...retirement...ughghgh...
*BC - Before Children
Re:hmmmm (Score:5, Insightful)
I think that the point he was making is that people need to live within their means - not that they don't have expenses. Heck, we all have expenses; the point is to live within them.
Re:Look in a mirror (Score:3, Interesting)
I was in this boat -- entry-level consulting job out of college, long-distance relationship, stupid college-built credit-card debt. I moved into a house with roommates, ate a lot of ramen, and cut way back on the beer budget.
You pay your taxes, sit there with $60K, and say, "Woe is me"? I see it all the time
I agree with you on one point -- five years later, I'm married with a young child, paying down a mortgage, and our situation is much, much better. But the key wasn't the tax benefit -- it was moving to a cheaper area and buying a starter home instead of stretching for a new house.
If only I could've been smarter sooner! Argh. Right behind better math skills, our educational system could sure use some basic lessons on personal finance.
Re:Look in a mirror (Score:3, Insightful)
Three years later and I had a cash buffer nearly 2x what it was when I bought the house. And yes, I'm paying extra toward my principal. Now, a good bit of that poofed when I got married, and I'll admit that my job at the time had rather high raises, but the key was that I kept my spending down. Getting a bonus or a tax refund or a raise didn't mean I figured out how to blow it immediately. Sure, I spent some of it, and Uncle Sam took some of it, but I still kept a portion for savings.
The point of all of this is to live below your means and pay yourself first. If you don't do both of those you're going to regret it. If you say it's not possible, then I suggest that you re-evaluate just how you're spending money. Go read some good financial planning books, sites, or even go to a financial planner if you simply can't control yourself. You may be surprised just how much you can save.
Or, hey, ignore it and work until you die. Me, I plan to retire well before age 65.
Re:hmmmm - heart of productivity (Score:3, Interesting)
| What characterises all of [the visionary enterprising companies]
|
| transcends profit-making; a core purpose around which the business is
| organised, motivates its people and from which it then makes money.
| The current organisation of US business, seeking to maximise profits
| in the shortest possible time, is undermining its great companies.
sorry, the correct URL link for that is:
| Will Hutton, Apr. 29, 2002, 'What Europe can teach Uncle Sam'
| http://www.guardian.co.uk/g2/story/0,3604,706810,
Makes me glad (Score:2, Interesting)
If I were working for the 50% cut company I would be polishing my resume.
Divine intervention (Score:3, Funny)
that kind of crap would not happen...... (Score:2, Insightful)
I suggest getting out of a company that does this more than one time EVER, if it is feasable for you to do.
bad managment leads to lost jobs.
that is only MHO though so take it as you like
As i remember... (Score:3, Insightful)
Heh! (Score:5, Funny)
- A.P.
At least people are still working... (Score:2, Interesting)
Re:At least people are still working... (Score:3, Insightful)
However I'f I had to take a 50% paycut or get fired I'd be screwed both ways, as there is no way I could live on half my salary for a month and the insurance Co. would be able to show that I caused my own redundancy by not accepting the pay cut.
I'd start looking through my contract at this point and see if there is any thing about time limits before announcing a pay cut.
That or by a shair or two in the Co. and turn up at the AGM and start asking embarrancing (sp?) questions about directors pay.
Pity you are not in the UK. Hear any shair holder is allowed to spend 2 hours a day at the Companies HQ looking over the directors renumaration package, take any notes they want, and leave the building with them.
This would give you lots of amo. for the AGM
Might not be bad if they handle it right (Score:5, Interesting)
Yeah, right! (Score:5, Insightful)
I'm glad I work for the government now....
Re:Might not be bad if they handle it right (Score:5, Interesting)
Don't accept the cut (Score:3, Insightful)
Re:Don't accept the cut (Score:5, Informative)
Um... shouldn't that read, "If you have a contract they can't change at will"? A fair share of employees these days are precisely "employees at will," with no obligation on either party aside from payment for services rendered. This is the way I've always worked.
This is actually kind of the problem with employment at will: management can hand down whatever terms they want, and it's their way or the highway. This is justified with deference to "the market," on the theory that if conditions get bad enough, you can just go work somewhere else. But a lot of times that's impossible or very difficult in practice; if they have you working long hours for low pay, you have very little time or resources to seek another job.
I'd prefer that I had a set contract for most of the jobs I've had, but that's not the way it's worked.
Re:Don't accept the cut (Score:2)
Chances are that the employee's contracts state that they are 'at will'. However Illinois labor law may well overide the contract.
Looking over the company financials I can see why they would be pushed to this. However even in a downturn IT skills are still in demand.
If employees are thinking of jumping ship what I would do in this situation is to look for a way of nullifying any non-compete that they may alledge is enforceable. Cutting pay in half looks like a material breach of contract on the company's part. They probably don't have the cash to fight a lawsuit. So see a lawyer and find out if they can dump some sort of demand letter on the company, then cut out the middleman and work for the end customer direct...
Managers too? (Score:2, Insightful)
I work for a company that put a 3% cap on raises at the end of last year for us normal people, claiming that's all it could afford (I know, a lot of people didn't get anything...), but more than doubled the salary of a VP one month earlier.
marketing monkeys ARE cheap. (Score:2)
on average, for "equivalent" levels of expertise and experience, i would say that they make about half of what Engineers do.
Corporate bastards! (Score:3, Interesting)
Not to say it's much better here, but...
Re:Corporate bastards! (Score:3, Insightful)
Then again it could be my particular neck of the woods so to say.
I do live in Ohio.....
I am certain that the Devil has a hold here of some sort(tounge in cheek, In the movie "Needfull Things" when Ed Harris asked Max Van Sydow(Satan) where he was from ? , Akron...Ohio....(I live here) But when you look at the number of politicians, presidents, actors, sports legends, etc that come from Ohio it seems a little odd.....
Libertarianism is a WONDERFULL thing Imho, I just wish they would change the name, it seems to people who are not familiar with it to alighn your political beliefs to Jimmy Carter or worse Bill Clinton. If in europe say they came up with a new political party , completley pure of intent and benevolent in function and called it say...Nazipuffism, I doubt it would garner much of a following.
I see the same with Libertarianism, my boss jokes he would be a Libertarian if he actually thought they could win anything.....
Thinking about it.... (Score:2, Interesting)
Is that wrong? does it only apply to permanent decreases? or a certain percentage?
or do / did the workers at this company have the opertunity to take redundancy or sign a waver over their rights not to have a pay decrease?
industry standard?? (Score:3, Insightful)
DVIN [yahoo.com] is not an industry standard at anything, except how to go out of business.
Re:industry standard?? (Score:2, Insightful)
You stupid bastard.
Re:industry standard?? (Score:3, Interesting)
Honestly though, I'd bet that a move like this is calculated to create attrition, as much as it is to create immediate savings.
Dirty, dirty, dirty.
Cash vs profitability (Score:5, Insightful)
The real problem is that cashflow problems can be extremely hard to get over... and now they've probably alienated most of their remaining staff. I would hope that this comany tried their hardest to liquidate furniture, benefits, executive cars, office space etc before they did this, otherwise they'll have a mass exodus on their hands (which may of course be what they want).
In Europe, where I work, it's much harder to do something like this, for better or for worse; most countries don't allow unilateral cuts.
Alex.
Working for Uncle (Score:5, Interesting)
Re:Working for Uncle (Score:5, Insightful)
Not good (Score:5, Insightful)
Better, actually, to acknowledge that the staffing is too high, and cut some staff outright. Better for the company, and, really, better for the staff that do not have to live in a constant state of anxiety and insecurity while trying to do their job. I mean, what do you prefer: get cut outright, with a couple of months salary in your pocket and free tolook for something better; or losing half your pay for a month, maybe for the next month as well, then maybe get cut anyway (or see the company collapse) and never see that money again - and all the while expected to do your job instead of having time and energy to search for a better one?
/Janne
Re:Not good (Score:2)
Actually, I don't know; if I was working in a place I really liked with a community of folks I was close to, I might almost prefer the lower pay to keep the whole affair in gear. Call me idealistic or bleeding heart or whatever, but the hardest part of the
Which is why, I think, companies shouldn't be so eager to go public so soon after they start. I mean, the reason is obvious: a huge influx of IPO cash to do with what you please. But then you're beholden to the shareholders forever. And they care about nothing but profit. If the company remained privately held, there could be a company-wide consensus that instead of increasing raw earnings, they would allow some "expenses" to grow: remember, salaries and benefits all count as expenses on a company's bottom line.
I personally would love to work for a small-ish company that wasn't rolling in cash, but had a steady revenue stream and put most of that back into marketing, development, salaries, and benefits instead of trying to cut any of the above for the profit of outside shareholders.
Re:Not good (Score:3, Insightful)
I've been there and did take the pay cut. But that was a very small company where everyone left owned a significant share. If I was just an employee, my resume would have been with agencies the day after the cuts were decided.
With hindsight, it was a mistake, and we should have given up sooner. But at the time, we still thought there was a real chance to turn the company round and end up with more money in the end, and no-one wanted to be the one who made it impossible for the others to continue.
One Approach (Score:3, Interesting)
The good side to this is that the remaining people were the ones you want to keep - strong performers who brought out consistently good results. And they did use some more-or-less formalized and official measures, so it was not just "Who annoyed the boss today."
The bad side is that it showed a complete lack of loyalty to long-term employees. One was a 20 year veteran with a wealth of knowledge and another was a single mother in a tough situation, and those are just the ones easy to put into writing. This lead to a big hit in morale, which lead many of the top performers to leave because they had no problems finding other jobs.
Better than keeping everyone for a one-month 50% paycut? Maybe. It probably means better long-term health for the company. But it means worse short-term performance for a staff which is overworked and terminally depressed.
To be fair, I have no idea what I would do if I were a manager. This is why I have no interest in climbing the ladder of management.
Another Approach (Score:3, Insightful)
Because if your DBA suddenly loses her husband, and you aren't sympathetic, you lose a DBA.
If your NOC monkey's car goes poof, and he's 10-15 minutes late - then you either have to bitch at him, or fire him, and you lose a NOC Monkey.
No, its not a manager's duty to make sure that an employee's home life is peachy keen, but it IS part of his or her job to remember that serious homelife problems can affect an employee's performance drastically - and cutting them, just to preserve your bottom line will likely result in other employee's jumping ship just because they percieve an unsympathetic management staff.
Yeah, fire the slackers. But giving shit to hard workers who have something happen that isn't their fault is -really- poor management practice.
(Not assuming that's what you do, just commenting that you cannot just look at the bottom line - you have to look at the bigger long-term picture as well as the immediate short term goals)
Give them time to fix the problem, no more (Score:3, Insightful)
There's a HUGE difference between giving a suddenly widowed employee six months to process the death of her husband, or an employee a few hours to deal with a mechanical failure of their car, and letting stuff slide indefinitely.
I'm not saying that a single mother has 6 months to find a husband and get married, but she needs to find a workable solution. Fast. Management can cut her some slack if her usual daycare provider is sick and can't take care of her kids, but can't let her constantly go home early while her coworkers all work late several times a week because her current daycare provider requires her to pick up the kid early. She needs to either find another daycare provider or another job, or some other solution (e.g., *always* being the first person in the office because she puts in her extra hours in the morning).
The best example I've ever seen of this was a blind sysadmin. He was regularly asked how he would get to work during interviews, and he told the interviewer that that was his concern, not theirs. He asked for no accomodation on that, only modest accomodations (in one-time purchases for things like text-to-speech synthesizers) required to do his actual work.
THE CYCLE OF STUPIDITY (Score:3, Funny)
2. One of the people we're going to fire is a broke single-mom. Oh well, not our problem.
3. Cut staff.
4. Hmm, people are quitting and citing "overwork, lack of stability, and lack of loyalty to veterans and moms" as reasons.
5. We'll have to hire some more people to replace them... We wanted to keep these people...
6. Gee, good people from outside sure cost tons more than we were paying our laid off veterans.
7. We're over budget again, have to fire some people...
And the cycle goes on and on...
spewing resumes (Score:5, Funny)
MISMANAGMENT ......period..... (Score:5, Insightful)
I have in the last week been offered a job at a significantly higher sum than their cutoff number, and as a counteroffer I have been offered by my current employer a 24% share in a spinoff of ourselves dedicated to the sales and development in my area of expertise.
The coffers of companies marketing and purchasing budgets are ovrflowing since the 911 hold on most big dollar activities. Companies are gearing up to spend.
If you have a product/service that sucks, or if managment of that company is so blind to have had too much belief in an idea and over employed based on those misconceptions of the product or its marketplace youre screwed.
Big money is moving, you just need to be in the right place to catch it. If youre not its managments fault. PERIOD. Now with that said, managment will find any excuse they can to mask their involvment in your current situation, the first is to blame the economy, but even that one is wearing thin with most.
Overexpansion, Overmanagment, Underselling, Overpaid salaries (although 60k isnt much for even a howler monkey)
I looked at the company in this article, I still cannot see what tangible product or service the sell clearly, THAT is a problem in my opinion and probably has something to do with their current situation.
I wonder how much of a Pay-Cut managment is taking ?
No Pay... (Score:5, Funny)
:)
Re:No Pay... (Score:5, Funny)
The bottom line (Score:2)
Sorry, but... (Score:2)
Cut all you want, they'll steal the rest... (Score:3, Insightful)
They also seem to have forgotten that the vast majority of the employees have NO stake in the company. They're probably not going to be thrilled to take a kick in the groin to shore up someone else's stock options.
Finally, in the memo, it says if you don't accept it, notify the company and they "may" terminate your employment. Guess that's one way to find out whether you're really irreplaceable!
Cut the dead weight! (Score:5, Funny)
Chief comes before Programmer, Executive comes before Technical...
Not even 2 week salary liquidity? (Score:2, Flamebait)
I don't know whether this is typical for the U.S. lifestyle, but in the Europe you don't usually have such low reserve cash (not necessarily on the correct account, but accessible). The paycut was at least announced in advance...
I think it is still better than to be fired - at least you can search for another company while still having some income.
This has been repeatedly documented (Score:2)
IT paycuts are becoming the norm. HR people I have spoken with have been flooded with resumes of laid-off dot-commers and web-designers. Network engineer, java or C++ programmers and IT support positions are becoming scarcer then hen's teeth, so to speak.
50% paycut for just May? (Score:2)
Accepting this paycut will limit your legal rights to your full salary. Plus, what real belief do you have that once management finds that this little jewel of a tactic works, that they won't use it every quarter'e end? If you are going to accept this paycut, you should at least agree with your management that the other 50% is a debt owed to you. Write a lien and file it with your county's recorder office. This way, if they go bankrupt, you can at least collect this part through bankruptcy court.
It's one thing for them to pay you 50% now and the rest later. It's an unconscionable thing to let them just pay you 50% and have you throw away the other 50%.
Also, start floating your resume around. This ship is showing some leaks.
Digital Freedom
Deal with tough times? My ass... (Score:2)
Personally, I wouldn't put up with that bull. I'm nobody's sacrificial lamb.
There are two types of people in the world: Those who let things happen to them, and those who make things happen.
The first group gets shit on by their bosses/spouses/parents, accepts mandatory pay cuts, lets everyone go in front of them in traffic, prays when things go wrong, and complains to everyone about how the world is so unfair.
The second group takes charge of their situation, demands bonuses, decides for themselves their place in life and the world, and takes corrective action when things don't go as planned.
So which group are you in?
poker tournaments (Score:2)
Took my last $200, entered a poker tournament a week near my home, and made $3000 in 6 weeks to scrape by.
I envision this scene (Score:2)
Exec 2: We're not doing so hot this year?
Exec 3: We just spent $5 billion on our new toaster strudel division, how could we be doing badly?
Exec 2: What are we going to do?
Exec 1: Well, this will sound crazy, but, we could not take exhorbitant bonuses this year for the good of the company...
(Execs 2 & 3 tie noose and immediately execute Exec 1)
Exec 2: Phwew, that was close... Without a $1 million bonus, how will I pay for my vacation home and vacation Mercedes?
Exec 3: Well, we still have to save money somewhere...
Exec 2: Don't employee salaries cost us a lot? Let's just cut those... Hey, I wonder if I can get us a tee-time for later today... (Wanders off.)
Exec 3: Ok then, so, we cut the employees salaries?
Exec 2: (On phone) Yes Mr. Fong, two at four o'clock--Hold on-- (Covers mouthpiece) What? Oh, yeah, do whatever... It's not like those people can quit, look at the job market.
Exec 3: Great, want another Cuban cigar? I'll light it with a 20...
At my company... (Score:2)
"ask" slashdot? (Score:2)
This might be more appropriate in the "Bitch to Slashdot" section.
So this answer will probably not be welcome...
I know it is cool to talk about how stupid "management" is. Remember, "management" is not an entity. It is a group of people at your specific company. Each company has a different group of people making these decisions, so any kind of general statements about "it" are just that: blanket generalizations that are of little use to any individual.
What else you should know about these groups of people at succesful companies is, their entire job is to make decisions. The vast majority of these decisions are of the form "we have $X and we need $Y, how do we [use the extra $(X-Y)|obtain the additional $(Y-X)] in the best way?"
They know how important employees are, and they are aware of the current market realities. If they cut pay 50%, they probably have a good idea of how many people will leave, how productivity will drop, and how much they stand to make in the end. All of these are dictated by the market, and no company (in this industry) is large enough to affect the market.
These things happen...markets fluctuate, and businesses adjust in response. It has nothing to do with good vs. evil or fair vs. unfair. Rather it's the difference between businesses that will succeed and those that will fail.
Summary (Score:5, Insightful)
Um. The company wants to become profiable by November, so they have 6 months, and they think cutting 1 months worth of IT salary is going to do it? 60/12=5 So Instead of paying out 5k per IT staff, they'll cut that to 2500. If they have 100 people, that's 250k. Anything less than that, I wouldn't consider worth the risk..
Besides, why would they need 100 IT people at over 60k?
Doesn't sound healthy to me..
My suggestion: GET OUT NOW
Keep the Employees` Faith (Score:3, Insightful)
-Always keep your employees informed about the state of things: finances, workload, potential customers, potential problem areas. Big surprises are bad, dramatic changes are bad.
-Let everybody know that their loyalty and willingness to stay through rough times will be rewarded in the good times. But, complementing that, don't expect them to take their loyalty too far (i.e. to the point where they can't live their lives, pay bills, etc) - let them know that you'll support them in whatever adjustments they need to make, including leaving if necessary.
-Use the experience, skills, and wisdom of your collective staff to find new ways to bring in income, reduce expenses, and streamline operations without sacrificing quality. Having 1 or 2 people at the "top" trying to make all the right decisions is too much - include the people who will be affected by them in the process, especially when times get rough.
-Don't do anything stupid that will put you in court, jail, congressional hearings, or on the front page of the paper. Business ethics are business ethics, through good times and bad - whatever yours are, don't sacrifice them just to save this particular ship, even if it is cutting those icebergs a little close.
How's that for a dose of idealism? But really - honesty, trust, integrity and creativity will get you through a lot more crap than a 50% paycut for your employees will. It's worked for us.
Instead of paycuts.... (Score:4, Funny)
Paying tthe Piper for going public (Score:2, Insightful)
This is the price you pay for agreeing to work for them. Not me, and not anymore. I've had it up to here with the greed of publicly traded companies, and I'm never working for one ever again if I have anything to say about it. They're more trouble than they're worth.
Work less, or leave.. NOW (Score:2)
Cheez. It is Divine, after all. (Score:2)
Trouble is,
people in the Chicago area are well aware of Divine and Flip Filikowski. Filikowski was a con-man when he managed to Jed Clampett his way to a fortune with Platinum and he's a con-man now.
Not confidence-inspiring.
What's to keep the one-time May cut from being joined by a one-time July cut, etc? What's to keep it from being followed by an ongoing pay cut to match the annual percentage? Who says that anybody will get a rais next year?
Corporations in general (though I know that gratifying exceptions exist) and Divine in particular have not earned the trust and loyalty of their employees. A company that had treated its employees fairly and had earned their trust might be able to do something like this after getting feedback from those affected. Divine's "stick-it" approach is certain to have repercussions.
grace (Score:5, Funny)
Which category does "subscriptions" fall under?
I find this funny, and disturbing... (Score:2)
I'd be happy I could keep my job in bad times.
And, not only pointing to the memo, but stating that management is just cutting other peoples pay so they can have their bonuses?
This isn't an "AskSlashdot", this is a "publically flame my company on Slashdot."
Yeah, your pissed (I would be too), but is this the right way to handle the situation? Or are you sinking to the same level as the "management" (or at least how you view the management).
For the record, I don't work for that company (and I'm not in management, anyway).
What a 50% Pay Cut Really Means (Score:5, Interesting)
A fifty percent pay cut says, "We know many of you will quit because of this horrendous abuse we are imposing on our employees, and to us, this is good, because if we just fired you, we'd have to pay unemployment benefits"
Yearly raises recently came around at the company I work for, and my raise was 0.5%, a percent of a percent. So, I did what any self-respecting working stiff would do, I found a new job for a company that makes enough money to pay its employees.
I get the feeling that a number of corporations are leaning on the current state of the economy to cover up their own stupidity and lack of management skills. I always watch the want ads in the Sunday paper (even now that I am starting a new job on Monday), why? I think it is a good exercise to get a feel for where the job market is going. Should I consider pushing for training in one area vs. another, and that kind of thing. What I have seen has been an upswing in people looking for talented and experienced help. I get the feeling that successful companies realize it is better to get somebody who has some real world experience than to go cheap and hire straight from school (of course, larger operations still recruit newbies, but they have the staff to train them proper, and the need for people who'll put up with a large amount of grunt work).
Actually, even though I found a job right away, I still have to budget next month to stay afloat. The new job has a two week delay on pay, and my current job doesn't, so I miss a check. To boot, last month I had to pay Uncle Sam, and buy things for spring, like a lawn mower, etc.. Well, it was an expensive month overall. Luckily for me, I have some reserves for the tough times, and with some frugal behavior, I should be ok.
If you don't have money squirreled away, you might have to get creative. One thing you could consider doing is selling some stock for a loss. You'll get cash right away, and capital losses are a tax deduction. Also, if you have something that you could sell, you might think about that. I have the luxury of being able to sell my old car, as it isn't completely worthless yet, but most people can't afford to do that (however, if you drive a nice new car, you could sell it, swallow your pride, and downgrade - a car is for getting there, not being mr. cool).
Bottom line, I'd recommend updating your resume and sending it out. Why stay at a company that treats its employees like s#!t? A good company with solid management recognizes that people are the greatest asset a company can have, because people learn and improve their skills with time, while capital investments quickly becomes out-of-date.
Best of luck to you.
Re:What a 50% Pay Cut Really Means (Score:4, Insightful)
Accordingly, we are requiring each employee at or above a certain level ($60,000 annual salary) within the Company to take an immediate 3.85% reduction in your annual salary. This reduction will be reflected in the compensation paid to you on the May 31, 2002 and the June 14, 2002 paydays.
If your position falls within the affected levels, we are informing you with this communication that your gross bi-weekly salary to be paid to you on the regular May 31, 2002 and June 14, 2002 paydays, will be reduced by 50%.
Continuing in your employment on or after May 20, 2002, will be deemed acceptance of the above-described pay reduction terms. In the event you do not wish to accept the reduction, you must advise the Human Resources Department immediately. The Company will then take the appropriate action, which may include the elimination of your position or the termination of your employment."
Which reads, pretty much "we are screwing you out of your pay. If you don't like it, then leave."
Now, if their goal was to keep employees despite this unfortunate needs for pay cuts, the second half of the memo would read something like this:
"We sincerely regret the need to have to take this action. As you are well aware, our company is going through a very difficult time financially. We are initiating this action in order to spread the financial burden out across our employees rather than take the more drastic measure of having to eliminate some positions altogether.
Our goal in this action is to increase the profitability of the company and maintain employment for each and every one of our employees. It's going to be a difficult road, but we are confident that with the support of all members of our team, we can get through this difficult time. Once we are in a better financial position, we plan to return everyone's salary to the previous level. Again, thank you for your understanding and support."
This says "we're screwing you out of your pay but we'd really rather not. We know it's a crummy thing to do but it's better than the alternative, and we hope to be able to make it up to you someday."
If I worked here, even if I wasn't being affected by the pay cut, I'd be outraged by the very thinly veiled message being given, namely that they don't care about their employees at all. it would serve them right if they lost most of their employees and then couldn't recruit new ones because people were so outraged at the way people were treated.
Hm, OK, next company on my list of places I would never want to work is now Divine.
How my company did it: a bad example (Score:4, Interesting)
My present employer (but not for long!) had cash flow problems last summer. First, we all took a one-time pay cut, but that didn't solve the problem. In October word came down that the entire company would be taking a 15% salary cut until further notice. The announcement came with lots of apologies and stuff.
Here's what I was expecting: I was expecting to get information every week or so about the company's cash position, and whether and when we would be returned to full pay. At the very least, I expected to get some kind of update or status report with my next pay stub.
That was six months ago. Despite the fact that the company has since lost five employees out of a staff of 15-- all to people leaving to take better jobs elsewhere-- no salaries have been reinstated. Nor have we received any information about when that might happen.
Do not do this. Do not treat your employees like their salaries are a favor from you, to be manipulated at your pleasure. Even though we're all pretty well paid people, we still depend on that money to feed our families and make house payments; it's not all going to sports cars and yachts, you know. If you have to take some of my salary away from me for a while, make it temporary and keep me well-informed. That's not too much to ask, is it?
Do what I did... (Score:3, Interesting)
About a year ago, I was told that of the three people we had working a total of 96 hours a week, we had to cut back to 72 hours a week. As the lead auditor, I was given first say as to how this would work. I could choose to keep my full-time, sack the part-time guy, and screw my other full-time person out of a shift if I so chose. I told them that I would not make their firing decisions for them.
So, they chose. Everyone else got to keep their hours, and I was reduced to half-time. I told them I would not accept the cut, and if they needed to reclaim the hours, I would continue working at full-time until they notified me in writing of my termination. They hemmed and hawed, and eventually gave me written notice terminating me a month hence, long enough to train the other full-timer. I went on to a job that did not suck so much, at which I work today.
About a month after my dismissal, I served them with a request for the severance package, under whose provisions I was eligible for two weeks full pay if I was offered less than 80% of my regular wage. They fought me on it for a couple of weeks, but eventually came to realize that I had them by the short hairs.
My only regret is that I didn't get to see the look on that bastard manager's face when he found out.
Union now! (Score:5, Interesting)
Why should IT workers accept less than their moron bosses?
Why should this person accept a 50% pay cut? Do you think public school teachers or Teamsters would?
One answer is that it's time to unionize. IT workers are not valued for their intelligence or problem solving ability. They're valued as "human resources" much as a company's mineral or financial resources -- to be used when necessary and discarded when useless.
If there were a union, this company would be shut down right now.
Companies should be paying attention (and paying) the people with their hand on the switch. How long could a company last with a marketing work stoppage?
How long do you think they'd operate with an IT work stoppage?
It's time to stop abuses like these before you become "too old to be retrained", replaced by an indentured H1-B visa worker, or have your salary reduced to pay for the CEOs new manor house.
Re:Union now! (Score:4, Interesting)
If there were a union, this company would be shut down right now.
Doesn't this defeat the whole point of unionization? If the company is shut down, then everyone would lose their jobs and would then take a 100% pay cut.
Re:Union now! (Score:5, Insightful)
Yes, if the company were shut down, it would be very bad both for the company and the employees. But the threat of shutting the company down could prevent things like what this company did in the first place.
Re:Union now! (Score:3, Interesting)
Of course, that also means it is important to help Indian and Eastern European tech workers organize and protect their rights.
But really, as someone else has said, the threat and ability and determination to carry it out is more important than actually carrying it out. If management sees that the company will go under if they screw the employees, then either they will back off, or management believes the company is already going to go under. And if the company is going to go under, why would you want to stay on the sinking ship?
IT is a while collar job (Score:3, Interesting)
If you are unhappy, do some work on the side or open up your own business.
Re:Union now! (Score:5, Interesting)
If it were a union, you would be paid hourly, after all the union collects a percentage of your work.
If it were a union there would be no technological edge. Unions don't preserve the right for an invidividual to exceel or achieve, that would be unequal.
If it were a union, pay would drop.
If it were a union, corporations wouldn't care, they would just get another.
I personally despise unions. Loosing a job and being fired and moving with the flow is PART of life. Did you know a union won't save you from getting a heart attack? A union won't prevent you from being poor, and a union won't put food on your table? All a union does is protect the rights of workers, and personnaly, i wouldn't want a union managing nor marketing my skills and rights.
Unions are for jobs that people want to make a living from, that don't necessarilly require anything but a VERY specific skill. Unions protect painters, mechanics, people with very very specific skill sets. You won't be fired because you only know how to paint ceramics, but they will move you somewhere else or layoff a bunch of people and rehire as needed.
I like the freedom of choosing my job, my pay rate, my career path and my knowledge base. Having a union would take away all credibility of the work i do and give it to someone else who is ultimately just as bad as the corporation they're supposedly protecting you from.
Being an IT guy i work at the exective offices, i have 2 offices, one in our corporate building and one in our data center. I have access to all the perks of upper management without having to be management. Why would anyone want to give this away? Even at MUCH smaller places, i was treated with the utmost respect and sincerity.
Sure, if you want to be a tech support person day in and day out the rest of your life a union might save your job one day, but if you need that kind of protection, you my friend have no ambition or goals and should be fired to be forced into doing something for yourself instead of waiting for someone else to be your mommy and daddy and do it for you.
Unions just don't work in my opinion. Amtrak would be profitable if someone picking up trash didn't need a unionized job making 50k a year. Telephone services would be much more advanced and high tech because they wouldn't have to pay a drunk union worker 60k a year to go to the CO and switch a circuit. After all these could be high tech jobs offered to people with a career ambition in mind rather then a protection of there right to be lazy as if your SUPPOSED to have that job. I'm sorry to all the telephone works who are in a union and don't drink, but man of all the companies i deal with, i have YET to come across a telephone repair man who ISN'T BLIZTED or talking about getting SMASHED after work.
What a life huh.. so until someone shows me a union that preserves ambition, the freedom to choose, the freedom to exceel and the freedom of RESPONSIBILITY i don't buy it. We aren't working with explosives, breathing in chemicals or working 1 mile under ground. The government protects our work environment and hazards, so whats the point of a union? they DEFINATLY served there place and got works what they needed, but all good things must come to and end.
Be responsible, get your own job. Don't wait for someone else to take that responsibility for you. After all, your just GIVING AWAY the very freedom your supposedly fighting for.. just costing EVERYONE Involved alot more time and money.
Re:Union now! (Score:3, Interesting)
An interesting note, management had their bonuses cut shortly afterwards...
Jason
Re:Union now! (Score:4, Insightful)
No, you're the one who's trolling.
Unions do not serve to protect weaker workers at the expense of the hotshots. Read your fscking Adam Smith (you know, the father of the Free Market) to see what his opinion on unions is.
Frankly, the imbalance in bargaining power between employer and employee is such that the only way the workers can get a reasonable wage and decent working conditions is by collective bargaining. This is historical proven fact, and the reason unions exist in the first place.
If an employer can't pay union scale without going out of business, that means that he is not profitable enough to pay his employees a decent wage. According to the Free Market doctrine, he shouldn't be in business, but he should go broke. Nobody's obliged to support a bad business model, and especially not by taking lower wages and worse conditions.
Remember, the Free Market cuts both ways. Read up on some history and economics before you make a fool of yourself in public again.
MartIgnore trolls from bosses (Score:3, Insightful)
Easy workaround (Score:5, Funny)
And if you can find any executives who got bonuses, flog 'em mercilessly until you feel like you've gotten half your salary's worth.
Let me get this straight. (Score:4, Insightful)
Yet in spite of all that, those making over $60K a year somehow are unable to save enough to pay HALF the bills for one month? What would happen if they got fired? Is cost of living so horribly expensive in Chicago that 60K might as well be minimum wage?
-Restil
Re:Let me get this straight. (Score:5, Insightful)
Take my parents for example, combined they make well over $100,000. They certianly doin't live paycheck to paycheck and they invest quite a bit. However it would be a hardship if 50% of their pay evaporated for a month. There are bills to be paid and I'm betting they do total half or more of their total income. So if half of it dissappeared, they'd need to tap into savings.
Well contrary to what you might think smart people do NOT save money by hiding it under a matress or even leaving it in a bank. A good deal of it is in non-liquid assets like land, their house, etc. This cannot just be easily liquidated. Even at a large loss it would be problematic to liquidate it in a couple weeks. The most luquid asset they really invest in is stocks. However even those aren't something you want to liquidate unless it's absolutly necessary. In addition to paying captial gains (on those that are up) you then loose the potential growth.
Long term investments aren't something you just want to gte rid of, it costs you far more than just the actual money you get from it. As for getting fired, generally when you have a job of that level you have a contract that gaurentees you a severence pay of at least a monet, often more. Gives you time to get a new job, and so on.
Basically ti's jsut a really dick move on the part of their company. A paycut is one thing, people don't like them but in a slow economy a 4% paycut is probably something employees making that much wouldn't really get all that mad about. The problem here is that first, it's being applied retroactive to the beginning of the year. They aren't just cutting your pay, they are cutting what they already paid you for the first 6 months by 4%. Second, it's the huge hit that the employees ahve to take over the short term. Like I said, it really causes problems, even if you have saved up.
Also this is something that will make people additonally angry because there's no reason for it. If the problem truly was jsut a slower economy and profits going down, a standard pay cut would do the trick just fine. The onyl reason for a quickm drastic cut like this is to attempt to artificially inflate earnigs this quarter. And then there is the fact that the management is NOT taking a paycut and, indeed giving themselves large bonuses.
It makes people rather angry when they are forced to endure hardship because the morons up top refuse to take any responsibliity. SOmething tells me that had the management just not given themselves bonuses, it would have more than made up the total amount the company will gain in this pay cut.
My Opinion ... (Score:5, Insightful)
Tell everyone in the IT to stick together, and you may be able to "convince" the upper management, that going through with this pay cut, at ANY time, would be a "Bad Thing"
PS ... Start getting that resume polished up right now ...
How I handled this in the past... (Score:5, Interesting)
However, one time in the past we hit a real rough spot. We knew we had to reduce payroll. One of the steps was a temporary paycut.
But unlike the lead story here, the paycut started with the CEO (me) and all of the executive management. Then the highest paid ($80K and up) employees on a voluntary basis. That's right, we ASKED them to do it for the good of the company. Not a single person declined.
I promised that when things got better, I'd return all of the pay. Many smiled but didn't seem to believe that was likely. But, in fact, several months later, things did recover and I tacked on all the lost pay to their next paychecks (including my own).
I think the fact that I was the first to do it made a difference. It was hard, but it worked.
hmmm... beware signs of trouble ... alert warning (Score:3, Insightful)
IMHO, if they are not paying you at all in late May/ early June, then the reason is that they are doing so is in fear of not making payroll. Some management wonk probably figured it was better to make up this 5% dealey than to actually miss payroll.
Their is a slippery slope that a company gets into once financial misery sets in.
Do:
Good people leave,
customers get skittish,
lendors freak.
Loop.
My advice: start looking now. The company is flashing big orange DANGER warning signals, and passsing out a memo saying to ignore them, they're just for some silly regulation.
good luck
--Pete
From their home page (Score:4, Insightful)
"divine helps companies maximize profits through better collaboration, interaction, and knowledge sharing across their entire value chain."
OK, let me guess...
- The top management are all book-trained MBAs. They built the business on venture capital with handshake deals where who you know is much more important than what you can do.
- They are regularly written up in glowing articles in all the local business PR rags.
- They are in technology, but they have a VP of communications and/or marketing who previously did not work in technology, and who mocks it openly.
- Middle management is encouraged to think about their political standing within the company, and routinely value that over actually getting actual productive work done.
- The sales force dresses in Armani or similar, and drives late-model cars more expensive than $40K because it is supposed to give them an advantage.
- People who don't show up for happy hour are considered ineligible for promotion, despite the fact that behind their backs everyone hates everyone else and doesn't want to drink with them.
- No management has ever showed up at a goodbye luncheon, or if they did, they spent five minutes there and didn't speak to the outgoing employee.
- HR is the second-most powerful unit in the company (behind marketing) and establishes policies with the help of corporate lawyers.
- Golf is considered essential to one's career.
divine employees or ex-employees, how'd I do?Re:From their home page (Score:3, Interesting)
1) Many of the top management were not book trained MBA's - that would imply they can read. I mean this. You should have witnessed the ways in which these guys butchered the language.
2) They are not written up in business magazines in glowing terms, unless you consider "flaming idiots" to count. "Radioactively stupid" is one term I've seen used by a local columnist.
3) As the technology person for their marketing arm way back when, I can firmly state that their understanding of the concepts is rudamentary at best. They were focused on the marketing, not bad at it, but didn't really understand how to use tech to boost the pitch - they just wanted bells and whistles and buzzwords, not useful tools.
4) Middle management isn't encouraged to think, period. Most of the MM's (especially one rather hirsuite woman) were hired merely to put some distance between working slobs and the VP+ level folks. In one case, I kid you not, a manager was hired to oversee the personal assistants. Yep, the personal assistant to the CEO of one group couldn't actually *talk* to the the person she suported, she had to go to her boss, and then anything got routed where it needed to go. How stupid.
4) The sales force doesn't wear Armani. Primarily, they wear J. Crew and Banana Republic. This is, theoretically, a way for them to indicate to potential customers that they are hip and with it, but in a mature fashion. They are all pretty, and not terribly bright.
5) There is no one happy hour - everyone breaks off into cliques and talks shit about the other groups. You aren't elegible for promotion unless you worked for the prior company these guys all came from, Platinum.
6) They don't have goodbye luncheons - layoffs are handled by being escorted out of the building, under threat of arrest if you dawdle (no joke). As for employees who leave voluntarily, there is no mention of this: the company is so wonderful, who would ever leave?
7) HR isn't the powerful department. It's all the ex-Platinum people who are. Hires and fires are determined by this yardstick. So are other policies - if you worked for Platinum, you're golden and can do no wrong. ex-Platinum receptionists had more power than any non-Platinum people.
8) Golf not so much. Honestly, I wish they *would* have taken up golf, because it would mean uncoordinated idiots hitting each other with clubs, and maybe, just maybe, enough fatalities would happen and they'd have brought in competent execs. Or at least execs closer to "human" than "simian" in intellect.
here's my deal (Score:5, Interesting)
Triv
Re:RETROACTIVE paycut?! (Score:3, Informative)
Illinois Labor Board is located at
http://www2.state.il.us/ilrb/index.asp