Scary Business

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dorajar
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Scary Business

Post by dorajar » Wed Jan 28, 2009 9:42 am

From the Star Tribune:

Best Buy Co. Inc., said Tuesday it will resort to layoffs at corporate headquarters, even though 500 workers earlier this month agreed to leave voluntarily.

The Richfield-based retailer told corporate workers in an e-mail and in meetings Tuesday that an unknown number of employees will be laid off Feb. 19 as the company continues to cut costs amidst a massive slowdown in sales.

Even Target isn't immune from the economic woes gripping the nation. The Minneapolis-based retail giant laid off 600 employees Tuesday in the Twin Cities, adding to the list of tens of thousands of job losses at companies across the country.

Target said it also will not fill 400 open positions, making the cuts amount to about 9 percent of Target's 11,000 headquarters workers, the bulk of whom work at its Nicollet Avenue office in downtown Minneapolis. It adds up to the largest job-slashing in company history.
After weeks of cutting jobs to align its costs with lower demand, Hutchinson Technology reported a loss of $64 million, or $2.79 per share, for its fiscal first quarter Tuesday and announced 100 more layoffs from its plant in Eau Claire, Wis.

Hutchinson, which supplies disc drive assemblies and bio-measurement equipment, already had slashed 1,680 jobs since December, mostly in Minnesota and South Dakota.

The economic downturn is becoming more and more real every day. I've been feeling pretty smugly secure, thinking that a union job at the U of M is probably one of the safest places to be right now. But yesterday in our staff meeting it was made clear to us that the possibility of job cuts in our division is very real, or at the very least, cuts in hours and salaries. And now I'm feeling fearful too.

How are you doing with all this? How secure do you feel? What would you do if you were laid off? Are you making any preparations just in case?

citizenx
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Post by citizenx » Wed Jan 28, 2009 9:52 am

I've made drastic cuts in discretionary spending. I sold one of my cars. My wife still hasn't had the implant and crown dental work she needs. There was no tropical family vacation in 2008 and likely not to be one in 2009 either.

But hey, at least we've got low prices on Chinese made crap at Wal Mart.

thrice
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Post by thrice » Wed Jan 28, 2009 10:15 am

A close friend of ours lost his job in a business-to-business sales position in the food industry. I suspect he got a pretty good paycheck for it. Even with a strong resume, reputation and skills, he's having a very hard time landing another job. Fortunately his wife has a good paying government job, so even if they have to dispose of some assets, they'll survive, but it's a big self esteem hit for him.

My own situation is more complicated. I've been thinking about leaving my company for some time and making preparations for it. Part of the plan was to have a "straight job" on the side while spending most of my time on my own enterprise. Now it looks like some of the options for the "straight job", including part time work at Home Depot, will not be as available as I'd assumed. I am also concerned that my longer term investments and retirement savings will not necessarily rebound as quickly as I'd hoped, which is somewhat stressful to consider.

One certainly gets the sense of a larger cultural shift underway. While setting priorities on meeting real human needs is very important, it's also a good thing to realize that we have been expecting a lifestyle and services that would have been considered huge luxuries to previous generations, and have been financed far beyond our means, often with credit. Every increase in discretionary demands causes us to mentally raise the floor of our expectations, often beyond reason. When I see people lining up for a $5 cup of coffee, or read about a 12 year old boy being solicited for sex on his BLACKBERRY at school, it does seem a bit like a world gone mad that's badly in need of a reality check.

dorajar
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Post by dorajar » Wed Jan 28, 2009 10:40 am

I agree, thrice. This is a mixed bag. On the one hand, of course it's awful that people are being laid off and many will be in a position of losing their homes, their retirement savings, and the hope of financing their kids' college educations. On the other, I agree that we're long overdue for a reality check in terms of financial responsibility and recognizing the difference between genuine needs and lavish wants.

But as someone who already has a vegetable garden in her back yard, has only a tiny hand-me-down TV, and does her clothes shopping at Target and Marshalls (and rarely, at that)--there's not a whole lot left for me to cut out. So I'm hoping the "little guy" like me doesn't get hit too hard.

thrice
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Post by thrice » Wed Jan 28, 2009 11:51 am

Double whammy, Dora. Unfortunately I think a lot of our prosperity has been built by creating that artificial demand for luxury goods. Yes, we can get back to earth by stopping the purchase of Ipods and yachts, and we should. But the sad reality is that there are people who are feeding their families producing those luxury goods, and they will also lose their jobs with our newfound prudence. I really can't believe how much of our economy has been built on hot air and laziness. How many personal shoppers and dog walkers do we really need? Our ignorant ancestors somehow felt that those were things that they could squeeze into their own schedules.

There's a whole big macro thing out there that I can't fully comprehend, and the effects of which are yet to be seen.

citizenx
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Post by citizenx » Wed Jan 28, 2009 12:23 pm

"...people who are feeding their families producing those luxury goods...How many personal shoppers and dog walkers do we really need..."


Most durable goods are made somewhere else - and mostly in China. I could give a flying fornication if they lose their jobs.

As far as personal shoppers and dog walkers, I don't think many people employ such services - even well paid people.

The biggest hit to luxury goods you are seeing and will see that affects people here at home are things like auto sales, home sales, home remodeling. And the few remaining durable goods that are manufactured locally - I bet Polaris and Arctic Cat are totally in the crapper right now.

Good luck everyone!

thrice
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Post by thrice » Wed Jan 28, 2009 1:09 pm

There's an article I'm going to post from an economist from the U of Maryland. He insists that the economic woes stem from 3 main causes: overdependence on foreign oil, abuses in the banking industry, and the manipulation of currency by China and a few other economic powers.

Found it very relevant, because he says that the artificial levels of Chinese yuan values are a major factor in keeping their goods artificially cheap in the US market.

thrice
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Joined: Thu Dec 07, 2006 10:28 am

Post by thrice » Wed Jan 28, 2009 1:15 pm

I was using dog walkers and personal shoppers as an example of the kind of frivolous crap that people spend their money on. And I would say that a surprising number of middle class people do similarly stupid things. I know someone personally who hired a consultant for hundreds of dollars to tell them how to dress and shop for outfits better, and someone to come in and advise them on how to paint, decorate, and furnish their home. The decorating advisor was driving a gold Mercedes, so business must have been good. The customer was not a rich person, but gullible enough to believe that only an expert could tell them how to do these things. Probably convinced to believe that by watching the myriad of makeover shows on TV.

I see examples everyday of people buying goofy things that they can't afford. American made things. I know one neighbor around the corner from me with a $35,000 suv and a $40,000 bass boat in his driveway. Last I heard, his job is reading meters for a utility company. WTF is that all about?

thrice
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Starbucks Pot Running Dry?

Post by thrice » Wed Jan 28, 2009 6:43 pm

http://money.aol.com/news/articles/_a/b ... res/321236

Starbucks is closing 900 stores as income drops 69% in quarter.

Maybe some other folks are thinking that $5 for a cup of coffee is stupid.

dorajar
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Re: Starbucks Pot Running Dry?

Post by dorajar » Wed Jan 28, 2009 6:55 pm

thrice wrote:http://money.aol.com/news/articles/_a/b ... res/321236

Starbucks is closing 900 stores as income drops 69% in quarter.

Maybe some other folks are thinking that $5 for a cup of coffee is stupid.
Now there will only be 3 Starbucks per block in Manhattan? Tragic.

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