Cost-Cutting Is No Panacea for High-Tech Growth

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_hm
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One recent example - eetimes
_hm   11/22/2012 4:30:43 AM
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One recent example can be EETimes. Junko put in great effort to develop EETimes community. She had a vision and tempo. However, she moved out and person in charge implemented cost cutting. It looks this may have decimated EETimes community.

 

mfbertozzi
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Re: Cost cutting is prudent step
mfbertozzi   11/21/2012 9:56:07 AM
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Well, I guess several C-level managers will have the opportunity to consider your great and transparent analysis in order to adopt your wise idea and approach of the matter. Thanks for allowing EBN community to be aware of.

The Source
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Re: Cost cutting is prudent step
The Source   11/21/2012 9:28:36 AM
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mfbertozzi,

Executives at high-tech companies want positive financial results instantly. I think this approach to business is hurting the high-tech industry especially now that a transition is taking place from PCs to tablets and smartphones. A company whose revenues have fallen because their products can't compete must rely more heavily on their engineers and other talented employees to come up with new products and sound strategies that advance the company's prospects in the years ahead. That takes time. Cutting employees may only lengthen the time it takes for a company to turnaround its fortunes, and that's a problem.

Again, thanks for your comments.

 

Nicole


mfbertozzi
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Re: Cost cutting is prudent step
mfbertozzi   11/21/2012 7:49:39 AM
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Thanks to you Nicole, I have really appreciated your editorial; speaking for myself, it is really timely. Coming back to the point you have raised, I agree on the matter: in fact, one of the most important task in charge of talented people which are managing a company, should be to allow professional growth of knowledge and experience, based on the "life lesson" that they can teach.

mfbertozzi
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Cost cutting vs Future Investments
mfbertozzi   11/21/2012 7:33:40 AM
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@_hm: well, I totally agree with; I am wondering who is able to plan properly (from a strategy perspective) investiments if he doesnt' achive and consolidate a strong competence in the sector, especially for high-tech companies.

The Source
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Re: Cost cutting is prudent step
The Source   11/20/2012 11:12:21 PM
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_hm & mfbertozzi,

Both of you have raised a very relevant point which is that is it is often the case that talented people are fired from a company. These individuals can make a worthy contribution to the firm, but their talents are not tapped and in the long run the company suffers. One famous example of this is Steve Jobs who was forced to leave Apple Inc. before he returned to make it the company it is today.  

Sometimes I wonder if the pressure from Wall Street investors to meet revenue targets forces companies to make rash decisions, like firing hundreds or thousands of workers to cut costs while improving the company's financial position in the short-term. This action is often taken at the expense of a longer, well thought out plan that keeps employees longer, hones their skills and creates the environment in which they can develop the strategies that can turn the company around.

Thanks for your comments.

Nicole   

 

_hm
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Re: Cost cutting is prudent step
_hm   11/20/2012 7:23:25 PM
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@mfbertozzi: Yes, I have seen it many times. With one innovative product from some Dr/PhD candidate, organization thinks they have achieved everything. They expnad organization, pushing Dr/PhD in one repmote corner room. They do not treat him properly and he departs getting dejected. In 2 to 5 year time, orgnization sees downturn. Again they remember him, alas it is too late and ther is no point of return.

Another point is non technocrat leader, do not understand and do not invest in future technology, advance tools and manpower. These very important points.

 

mfbertozzi
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Re: Cost cutting is prudent step
mfbertozzi   11/20/2012 2:44:36 AM
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@_hm: good point; not to say I am right, but it appears you are describing a very valid picture, generally. It happened, in my eyes, also at the time of the "bubble"; once start-ups have gained first results in the market, tech people (companies' founder) have left their seats to others coming from the sectors you have mentioned. Quite easy to understand the mass of failures and "shutdown".

The Source
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Re: Cost cutting is prudent step
The Source   11/19/2012 11:58:47 PM
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_hm,

You say that cost cutting is generally a prudent step.  I'm not so sure.  It depends on what is being cut.  Is it the money spent on a company's private jet?  Do the cuts involve laying off engineers who may come up with the next innovative product?  Is it cutting costs for training workers?  Or is it cutting expenditures that go toward a company's bonus program? It all depends on what the cost cutting measures are for, how much will be saved, what will be lost as a result of these measures, and how will these cost cuts impact the company's ability to grow. 

Thanks for your comments.

Nicole

 

_hm
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Supply Network Guru
Re: Cost cutting is prudent step
_hm   11/19/2012 7:08:14 PM
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Whe CEO is technocrat, he understands this very well and controls organization to great height. However, when marketing person or account/finance guy takes over, company generally go down drastically. They generally do not understand long term future of organization and importance of good engineers.

 

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