Layoffs Getting Ridiculous
Here is a Wall Street Journal article announcing that the NFL is laying off 14% of its workforce. The NFL expects the job cuts to result in $50 million in savings. If this is an annual savings, it works out to $333,333 per employee. At that salary, I want to work for the NFL. Last I checked the NFL has a monopoly and long-term TV contracts with every major network, and it even has its own network, so future revenue does not seem in doubt. Ticket prices to an NFL game are so expensive that most people can't afford them anyway, let alone the unemployed, under-employed or those hurt by the recession. Hell, if people in Detroit are still paying to see the Lions, I'd argue that the NFL is more recession-proof than any business in America.

Firms, like the NFL, that are laying off people just because they think the recession may impact them are idiots. Needless layoffs, while theoretically prudent, are going to make the recession a self-fulfilling prophecy. A dip in profitability is not the end of the world, especially for a private club like the NFL.

Update: I just saw this article on finance.yahoo.com. Here is a quote from Barry Diller:

"The idea of a company that's earning money, not losing money, that's not, let's say, 'industrially endangered,' to have just cutbacks so they can earn another $12 million or $20 million or $40 million in a year where no one's counting is really a horrible act when you think about it on every level," said Diller, who's been known to lay off workers from time to time. "First of all, it's certainly not necessary. It's doing it at the worst time. It's throwing people out to a larger, what is inevitably a larger, unemployment heap for frankly no good reason."

I guess I am not the only one who thinks needless layoffs are stupid.