Trickle-down economics strikes yet again. In a perfect example of just how much of a scam this economic theory really is, Cisco Systems, a leading tech company, posted record fourth-quarter profits in both earnings and revenue.
How much you ask? Well, $2.3 billion in earnings and $12.4 in revenue. Again, both records for the company and on par with their estimates. Oh, and a 6 percent increase over last year during the same quarter.
So, how does Cisco plan to reward their workforce after posting records in both earnings and revenue? Raises? Bonuses? Various work perks?
No, they went a different route. Permanent unpaid vacations for 4,000 of their employees—or 5% of their global workforce.
You see, just after posting records in both earnings and revenue the CEO of Cisco, John Chambers, announced that “to meet next year’s numbers” they would be laying off 4,000 employees.
But don’t worry, I’m sure Mr. Chambers and other executives will be receiving a nice big raise and bonus for posting these records. And it’s behavior like this which shows why trickle-down economics is a complete fraud.
Doubt me? Then don’t listen to me, just look at what the CEO said. To meet next year’s numbers they would eliminate jobs. See, record-breaking profits like this year’s aren’t good enough, they need to grow profits. And sure, you can grow profits by assuming more business, but the safe bet is to eliminate expenses. In this case, 4,000 of them.
While I’m almost certain executives like Mr. Chambers are reaping the windfall of these record numbers, 4,000 Cisco employees will be unemployed very soon just so their stock options and bonuses will continue to increase.
They’re not “trickling down” anything. And even if some lower-level or mid-level employees do see a bump in pay, it didn’t come from better profits—it came at the expense of another person’s job.
And just to throw this out there, this is a company that has a revenue for 2013 of $48.6 billion and earnings of just over $10 billion. While they announced these layoffs, they also stated that they will continue to push towards being the worlds #1 IT company.
So ponder this — the company wants to continue to push forward to become the “worlds #1 IT company,” yet it’s laying off 5% of its workforce. Who’s going to cover that workload? Oh, that’s right, the employees they don’t layoff will just be given an even larger burden to deal with at work.
This is the kind of stuff which ticks people off. If a company is losing money, or struggling, and they announce layoffs that’s one thing — and usually expected. But when a company posts record revenue and earnings, then announces the layoff of 5% of its workforce, that tends to make people a little angry.
See, most people don’t care about how much these people make. What people do care about is when the wealth of these people, or businesses, is grown at the expense of their jobs, their pay and their benefits.
So spare me this talk of how “trickle-down economics” is our only path to economic success.
It’s a con, it’s a scam and it was created by the rich to continue to build their wealth on the backs of everyone else.