NO LOVE: A SIX PACK OF MAJOR RESTRUCTURING LAYOFFS

NO LOVE AT SOLAR CITY (ACQUISITION/MERGER)

SolarCity has notified the State of California’s Employment Development Department that it will be laying off 141 people at its Roseville, California as the company continues to integrate its operations into parent corporation Tesla, Inc. The jobs affected include middle management positions like inside sales directors, regional sales managers, and a regional vice president. Some functions like information technology, customer account management, and inside sales will be moved to other locations. Published reports suggested that SolarCity used aggressive sales tactics and may have been in serious financial trouble when it was acquired by Tesla.

suggested that SolarCity used aggressive sales tactics and may have been in serious financial trouble when it was acquired by Tesla. To be noted,  Solar City co-founder Lyndon Rive who served as the CEO until 2017 and his brother Peter Rive are the cousins of Tesla honcho Elon Musk. The solar industry is under extreme price pressure from Chinese solar panels and installations have been dropping in recent times.

NO LOVE AT ANGIE’S LIST (ACQUISITION/MERGER)

In order to eliminate duplicative positions, Angie’s List will be laying off 230 employees in their Indianapolis, Indiana headquarters as part of its anticipated merger with HomeAdvisor. Approximately 70 sales employees were released earlier. Look for further cuts as billionaire Barry Diller’s ruthless cost cutting team continues to “optimize” the acquired organization. IAC’s HomeAdvisor and Angie’s List will be rolled into a new publicly-traded company, to be called ANGI Homeservices Inc., and which may be up-valued by investors due to its size and leading industry position.

NO LOVE AT ELI LILLY (RESTRUCTURING)

Major pharmaceutical giant Eli Lilly has announced that it will be laying off approximately 8% (3,500) employees in a massive restructuring and redeployment of savings in other profitable areas. One reason for the restructuring is the loss of billions in sales of patented drugs such as the erectile dysfunction drug Cialis. 

NO LOVE AT NIKE (RESTRUCTURING)

Hear that “swoosh,” it is the sound of 745 jobs leaving Nike, Inc. as part of its massive restructuring efforts announced previously. Marc Bohn, a Nike vice president, informed the authorities that, “In June 2017, we announced that we will be shifting to the Consumer Direct Offense, a new company alignment that allows Nike to better serve the consumer personally, at scale." As part of that restructuring, Nike undertook workforce reductions in July and is now implementing an additional round of workforce separations.” 

NO LOVE AT ANHEUSER BUSCH (RESTRUCTURING)

Major brewer Anheuser Busch, a division of AB InBev, is laying off approximately 400 jobs related to its “The High End” product line. According to management, Anheuser-Busch is rethinking their “High End” business model and may be consolidating sales and operations to promote efficiencies. 

NO LOVE AT CINTAS (MERGER/ACQUISITION)

Cintas Corporation, the largest uniform rental company, has notified the state of Minnesota that it will lay off 232 people in the restructuring process to eliminate duplicative positions in their purchase of G&K Services, Inc. 

POLITICS: KILLING THE GOLDEN GOOSE

The two greatest threats to our communities, states, and our nation are political corruption and the rise of the self-serving “professional politician.”

Politics is not a “team sport” where you support and root for one side, but a serious business that can affect your life and future. It has been often said that the wisest course of action is to vote, not for your political party and not for activist-led special interests, but for the prudent, common sense, politician who understands that government is not and should not be a self-perpetuating business putting its own existence and needs before the needs of the people they purport to serve.

Here in the formerly golden State of California, we see a perilous precedent develop in California’s legislature with the introduction and promotion of Assembly Bill A.B. 1250 which affects “Counties: Contracts for Personal Services.”

Mostly this bill is designed to prevent counties from contracting services to those best qualified in the private sector in favor of keeping these jobs within the government and staffed by unionized workers whose salaries, perks, medical, and pensions are slowly bankrupting government entities on all levels: local, state, and national.

Proposed Law: AB 1250 would establish standards for the use of personal services contracts by counties, specify contractor disclosure requirements, and identify circumstances under which a county may contract for services. My comments appear in [brackets.]

Specifically, this bill would do the following:

"Prohibit a county from contracting for personal services currently or customarily performed by that county’s employees unless it makes specified findings, and all of the following conditions are met:

• The board of supervisors demonstrates that the contract will result in cost savings for the duration of the contract, as compared with the county’s actual costs of providing the same services. [Since many of the government's costs are artificially created, it may be impossible to verify the underlying data or methodology of computing such costs.]
• Contract proposals are not solely based on savings related to lower contractor pay rates or benefits, and contractor wages are at the industry’s level and do not undercut county pay rates. [This provision keeps wages artificially high and at the level of county workers to eliminate any significant cost savings to perform the work in the private sector.]
• The contract does not displace county employees, as specified, or cause vacant positions to remain unfilled. [This is nonsensical because the goal is cost-savings beneficial to the taxpayers and not a full employment opportunity act for unionized government workers.]
• Contract savings are large enough to ensure they will not be eliminated by normal cost fluctuations, the amount of savings clearly justifies the size and duration of the agreement, and the potential for future economic risk to the county from rate increases is minimal. [There will always be some form of adjustment that must be made to deal with unforeseen economic circumstances like the shortage of materials, etc.] 
• The economic advantage of contracting is not outweighed by the public’s interest in having a function performed directly by county government. [The public is not well-served by overpaid and non-productive government workers who are immune from being fired for malfeasance and incompetence.]
• The contract is with a “firm,” it may be terminated by the county for material breach, it is awarded through a public competitive bid process, and it includes provisions pertaining to the qualifications of the staff that will perform the work. [It is amazing that the qualifications to perform work do not similarly apply to government workers, many of whom are grossly unqualified for the jobs they hold.]"

Of course, the politicians who introduced the legislation saw fit to exempt the City and County of San Francisco from the bill’s provisions and ensure that the legislation does not impact current government services.

“Specify that the bill does not apply to contracts for architectural or engineering services, public transit, street sweeping, solid waste hauling, or construction, alteration, demolition, installation, repair, or maintenance work that is considered a public works project.”

For those wishing to read AB 1250 in full and in context, it can be found here.

NO LOVE AT PROVIDENCE HEALTH & SERVICES

One of Oregon’s largest private-sector employers has suffered significant operating losses and is now embarking on a cost-cutting campaign that will feature a reduction-in-force by approximately 210 employees against a workforce of about 111,000 employees. This does not include employees lost to normal attrition or consciously leaving administrative positions unfilled. 

The real extent of the layoffs may not be readily apparent as the enterprise turns toward using higher-cost professional staffing agencies and contract employees to augment staff when necessary and to provide a level of flexibility in staffing. It appears that the trend in a number of major industries is to use staffing contractors to isolate companies from the legal responsibilities of dealing with layoffs and other critical personnel issues.

Like most major health care operations, one of the biggest complaints in low Medicaid reimbursement levels. Some states have deliberately increased their Medicaid population knowing that the federal government would pick up all or at least most of the tab under the Affordable Care Act. It appears that Medicaid patients seem to require a greater level of care than those who were previously covered by insurance, especially those who are seeking long-delayed medical treatment for pre-existing conditions. An aging population is also exerting stress on the health care system. 

Let us not forget that Providence established a $150 million venture capital fund with about 100 employees that is headed by a former Amazon executive, Aaron Martin, and runs its own business incubator. By investing in other companies, Providence believes that it can profit from innovation as well as improve and enhance existing healthcare services. Hopefully, these innovations will be more than just another tracking app with little or no real medical-level accuracy or use.