NO LOVE AT HESS

Once again we find a major company, the Hess Corporation, a global energy company, embarking on a cost-cutting restructuring program that will result in at least 300, some say 700 or more, employee layoffs. According to Hess spokesperson Lorrie Hecker, “the company is also aiming to make reductions in its contractor base. We moved aggressively in 2017 to focus and up-grade our company’s portfolio. The combination of this cost reduction program and our upgraded-graded portfolio is expected to drive down cash unit production costs by approximately 30 percent" by 2020.” 

Funny, not one mention of the activists sparring with Hess in the boardroom -- like Elliot Management Corporation, which is demanding that billionaire, second-generation CEO John Hess step aside, sell certain assets to fund stock buy-backs to ramp up the price. No mention of whether or not Elliot Management Corporation will dump the stock to feather the nests of their own investors.

Are you asking yourself, Am I Next?

NO LOVE AT GOPRO (03/28/24)

AUGUST 20, 2024 — 15% OF THE WORKFORCE, 139 EMPLOYEES IMPACTED

Continuing their restructuring and cost reduction initiative, the company has announced it would cut about 15% of its workforce by the end of 2024.

Founder and CEO Nick Woodman noted, “2024 has clearly been a challenging year for GoPro, citing delays in project launches, declining sales on GoPro’s website, macroeconomic concerns, competition, and foreign exchange rate fluctuations in China and Japan. The company is aiming to be profitable in 2025,”

The layoffs - around 139 jobs - are expected to begin in the third quarter and would be completed by the end of 2024.

MARCH 28, 2024 — 4% OF GLOBAL WORKFORCE

Citing restructuring, according to an SEC statement, “On March 26, 2024, GoPro announced that it intends to reduce its global workforce by approximately 4% in order to reduce operating costs and drive stronger operating leverage.

JANUARY 9, 2018 — Original post…

GoPro, the company that revolutionized action sports selfies with its affordable and ruggedized high-definition camera has initiated the layoff of up to 300 employees, mostly those associated with its Karma drone division.

The drone division, which really never took off after a poorly executed launch that saw drones falling from the sky with power failures, faces even bigger problems as the use of its drone products becomes increasingly regulated, both here and abroad, to meet privacy and air-safety standards.

“Furthermore, a hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead,” the company explains. “These factors make the aerial market untenable, and GoPro will exit the market after selling its remaining Karma inventory. GoPro will continue to provide service and support to Karma customers.”

The drones are a cheap method to facilitate real estate photography, perform maintenance checks without undue personnel risks, and – unfortunately – take embarrassing or unauthorized pictures. Some counter-intelligence agencies are also worried about the weaponization of drones or their ability to interfere with aircraft.

Management, of course, used with the corporate-speak, telling employees that the layoffs were necessary “to better align our resources with business requirements.” It is no secret that GoPro’s stock is depressed and the company is struggling. Some analysts doubt that the niche company can recover its former luster given the proliferation of drone manufacturers from China. In addition, offerings from larger and well-financed camera competitors like Sony and Nikon are looming in the near future. 

However, the secret sauce is the drone's stabilization system which can be plugged into a hand-unit to produce great stabilized footage with a light-weight portable unit. I would not be surprised to find that the company morphs into a complete source-kit for video production, including editing and effects software, in the near future. 

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

COMPANY LOYALTY TO EMPLOYEES IS DEAD

There has been a sea change when it comes to health care. In 2014 and 2015, we saw the Obama Administration significantly enlarge Medicaid and sold it to the American public as if these people were part of the uninsured that the Affordable Care Act was designed to remedy. 

Now, with the changing of the tides and the Trump Administration, the chickens are coming home to roost. Both the federal and state governments are reassessing the effectiveness and costs associated with Medicaid -- mostly in the form of reducing reimbursements. 

After windfall hospital profits in 2014 and 2015, mostly attributable to the massive enrollment of the uninsured into Medicaid programs and which resulted in an influx in the number of people seeking serious medical care for the first time, the profit picture has drastically changed. 

Consider these two recently reported stories on San Diego-based Scripps Health Care which illustrates the issue from the CEO’s perspective:  moving from a “no-layoff philosophy” to layoffs are a necessary consequence of the current environment. 

(2016) San Diego-based Scripps Health recently revealed it will lay off 69 employees.

The layoffs, which will take place May 20 through Oct. 4, affect employees in the human resources and marketing departments.

Scripps Health President and CEO Van Gorder, who has reinforced a no-layoff philosophy over the duration of his tenure, recently spoke with Becker's Hospital Review about the layoffs.

Question: What were the circumstances surrounding the layoffs?

Chris Van Gorder: Revenues have flattened out due to healthcare reform and payer mix changes and we are seeing an increase in government-sponsored patients. Volume is up, costs are up and revenues are flat. Since we need to hit our financial targets to generate enough capital to comply with California's SB1953, which requires upgrading or replacement of our hospitals by 2030, we need to control our costs. But it's also the right thing to do for our patients. Lower costs mean more affordable access for our patients.  <3/22/2016>

(2017) San Diego-based Scripps Health's cost-cutting plan will include layoffs in 2018, according to The San Diego Tribune.

In a recent memo to employees and affiliated physicians, Scripps President and CEO Chris Van Gorder said the cuts are necessary to remain competitive, as payers increasingly focus on low prices in contract negotiations and patients with high-deductible health plans shop around for care.

In a statement to Becker's Hospital Review, Mr. Van Gorder indicated layoffs would happen at an administrative and leadership level. The number of employees or roles to be affected was not specified. "We are still hiring patient caregivers," he said. 

Mr. Van Gorder noted that major changes in healthcare delivery are forcing health systems to adjust. "Healthcare is changing rapidly with huge growth in ambulatory care and reduced utilization of inpatient hospitals — and given the elimination of the individual mandate under the Affordable Care Act, the uninsured will once again be growing nationally," he said. "It's important that healthcare organizations proactively change to address these changes, and Scripps is doing so with a major restructuring of our organization to (1) reduce costs for our patients; (2) increase the quality of our services even though they are already strong, and; (3) improve our patient experience in both our hospitals and our many ambulatory sites of care."

With the aim of lowering costs by $30 million, Scripps is making several changes, including restructuring its leadership model and implementing corporate services reductions. The reorganization comes after Scripps missed its annual budget by $20 million last year for the first time in 15 years, according to The San Diego Tribune. <12/28/2017> 

Are you asking yourself, Am I Next?