Profitable Multinational Cuts Staff to Reduce Costs

A profitable multinational dismisses an entire department

The numbers add up, yet the layoffs proceed anyway. A senior employee with unpaid overtime and exemplary dedication was let go along with his colleagues because "from above" a cost reduction plan was approved without the company facing any economic problems: the firm, a well-known and profitable multinational, makes money. The striking aspect is not the case itself, but how naturally it fits into a segment of the labor market where commitment is demanded from workers but not reciprocated.

The adjustment is executed on profits, not losses, and the signatory knows that a veteran workforce weighs on the bottom line. The uncomfortable question is not whether the company can do it, but why it pays off.

The case: profits, unpaid overtime, and a mass exit

The initial account is that of a relative dismissed after years of dedication, with the company's usual rhetoric: they were asked for commitment because "the company will do well, and therefore so will you." Meanwhile, overtime was not paid under an explicit and unapologetic policy: we do not pay overtime here; if you like it, stay; if not, leave.

A pattern that, according to several participants, repeats across other companies: demands for emotional commitment, flat compensation, and replacement by workers with lower salary expectations when the role can be rewritten. The company hid no dramatic reasons. There was no drop in sales or losses. There was a management decision and an exit date.

Why does a profitable company fire if it is doing well?

Because profit is not the only indicator the management looks at. Lowering the cost per hour worked improves margins even if revenue grows, and that margin is what is rewarded at the top. In the described case, and according to the account, the outgoing staff is replaced by workers willing to accept more austere conditions, a move that some participants also situate in administrative and accounting departments relocated to Poland, the Philippines, or Slovakia.

The paradox has a stinging detail: in many of these processes, departing employees spend their last days training those who will take over their roles. Knowledge transfer included. Some argue that turnover is part of the model and that most staff accept it from day one.

Seniority as a burden: the cost of letting go of a veteran

Each year of service accumulates rights that the company sees as a growing burden. Severance pay, with references in the thread of up to 80 days per year worked, acts both as a brake for the employee, who loses what they have accumulated if they leave, and as a cost for the employer, who prefers turnover over a consolidated workforce.

The most repeated proposal is to convert that severance into a personal fund that is filled year after year and that the worker takes with them, without paying it if they leave but without losing it. The argument is that the current rule binds both parties: it forces the company to keep unproductive workers, and it restricts the worker's mobility. With short-term contracts, the problem disappears quickly.

"Paid month, forgotten month": work is no longer for life

This maxim has become common sense. The employment bond lasts only as long as the current paid month, and the next one must be earned again. From this logic, the one who dreams of stable employment is the one who ends up deceived, and the sensible strategy is to work by objectives, not by hours: some count four-hour days and six or seven for most.

Another current adds selfishness as a method: train, apply to other companies during office hours, and switch as soon as a better offer appears. If the company optimizes, the employee does too.

The other argument: "if you add value, you are not replaced"

The harshest counterpoint comes from the business side. If the work of an entire department can be done by a cheaper workforce, it is argued, then that work was not complicated and did not add differential value. The implicit conclusion is that the blame for the replacement lies with those who allowed themselves to be replaced.

The reverse is less epic. Those who hold the latter view describe the employee's actual position as that of the weak party: tasks are taken away, everything is reviewed, punitive assignments are made, and colleagues look the other way. Enduring with minimum effort until the letter arrives is a strategy, but also a drain.

From doing the minimum to the internal damage reported

In the most extreme testimonies, episodes of sabotage narrated by a participant appear: a machine valued at 100,000€ damaged without anyone noticing and three wheels of a company vehicle damaged. These are anonymous accounts that solve nothing and expose individuals to liabilities, in addition to leaving the worker without the reference they need for their next job.

What almost all voices share is a practical conclusion: those who remain when the company has already decided to do without them end up worse. A negotiated exit or active job search works better than a war of attrition.

With labor costs as the key variable and turnover assumed as a management norm, it is likely that these cases will repeat in increasingly qualified departments. No one signs, however, what the bill for training, errors, and lost knowledge will be when the veteran is gone.

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