SASKATOON (Staff) – Cutting staff and contracting out work are misguided fads that can hurt businesses in the long run, says the chief executive officer of Federated Co-operatives Ltd.
Loyal employees are being thrown out of work for all the wrong reasons, Wayne Thompson told the organization’s annual meeting last week.
“How can companies expect, and how can employees have, a commitment to the company when the company has no loyalty to them?” he told 366 delegates from retail co-operatives across Western Canada.
“If employees are a company’s greatest asset, how can they be treated in this manner?”
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He acknowledged businesses must be as efficient as possible, especially in the new global trading environment, and sometimes changes have to be made that result in cutbacks and layoffs.
But too often, managers have used job cuts and contracting out as a quick fix to boost the bottom line in the short term.
Cuts despite profits
Thompson cited Canadian banks, which have been cutting back despite record profits. His comments came just days after more than 180 jobs were eliminated from Saskatchewan’s two largest daily newspapers and a twice-weekly newspaper in Yorkton.
In an interview after his speech, Thompson said the pressures to cut back are particularly strong on publicly traded companies.
“There’s some feeling that people are doing this just to make an impact in the marketplace, on the stock market, to enhance the value of shares,” he said.
Federated faced a serious financial crunch in the early 1980s. Thompson said it made the required changes, becoming more efficient and market-oriented, without the severe disruptions and job cuts often seen today.
The number of retail co-ops in the FCL system has declined from 340 in 1986 to 314 today. During that period employees increased from 1,718 to 2,223. The number of people working in the retail co-op system across Western Canada, combined with FCL, remained stable at an estimated 15,000.
