Companies Cutting Costs By Dismissing Employees

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images (3)It has come to light that this is a strategy for large corporations to increase company profits; their first action is to lay off staff. The main role of every Chief Executive Officer (CEO) of large organizations is to increase profitability and distribute dividends to their shareholders. The higher the dividend payout from a company to its shareholders, the happier the shareholders are and the higher the price trades for in the market. In recent news, we see companies such as Toshiba in Japan lay off 3,000 employees. Siemens, have estimated that they need to lay off 15,000 employees, and pharmaceutical company Merck & Co will be dismissing 8,500 employees. The short term social affects towards the corresponding economies are devastating. Germany, was anticipating that unemployment would lower by 5,000, but have had a surprising increase of 9,000 unemployed. Even though the numbers and actions are worrying it could also demonstrate a shift of employment towards the need for specialized employees and not general laborers as required by technology and pharmaceutical companies. In times of cut costing, we also see large organizations outsource work towards smaller companies that employ the dismissed.