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Technology Stocks : Compaq
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To: Captain Jack who wrote (61226)5/14/1999 2:13:00 AM
From: rupert1  Read Replies (1) of 97611
 
Captain: Elimination of employees... esp expensive managers helps the bottom line quickly.

As I understand it, the primary goal of declaring individual managers or layers of management redundant is to speed up decision-making and empower lower levels. Reduction in payroll costs is a secondary goal. So far we know of a few individual redundancies in senior management. Even allowing for the elimination of the cost of their support staff, it is not a significant saving. Add the cost of laying off and replacing those to be replaced e.g. CEO and CFO and I think the effect is probably neutral so far.

The DAP system has the potential of producing much larger net redundancies but when it was presented there was no mention of lay-offs. The talk was of the re-assignment of staff to demand-producing activities. Perhaps Services could carry more staff as it expands. But the changes do prepare the ground for a possible announcement of substantial new redundancies.
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