AM I NEXT? NO LOVE AT UPWORK

Santa Clara, California-based Upwork Global, a connection platform for freelancers marketing their services, has announced a 15% reduction in force.

The personnel realignment will impact 137 employees.

According to President & CEO Hayden Brown ...

This morning we shared the difficult news that we are reducing the size of our workforce. I know there is a lot to absorb.

How we got here

The landscape has changed significantly over the last few years and with that, many opportunities have opened up for Upwork, as the world at large became familiar with remote work and started to question old and outdated paradigms for where, how, and with whom work happens. Our business has doubled in three years and we just reached $20 billion of lifetime freelancer earnings on our platform. This was made possible by hard work from all of you, and you can be proud of this. Our mission to create economic opportunities so people have better lives has never felt more urgent or more necessary in a time of constant volatility and change, where talent and businesses alike are seeking out solutions that meet a new set of needs and values.

At the same time, in the past few quarters macroeconomic uncertainty has altered the outlook for many businesses, including some of our customers. We entered this year with an expectation for how our business would fare in this climate, and in the first quarter of 2023, we saw greater-than-expected headwinds, primarily as a result of Enterprise and larger customers further reducing budgets and deferring hiring plans. It became clear that while our business is strong and growing, our full-year revenue would be meaningfully lower than what we had expected.

The actions we are taking

Working as a high-performing and efficient team has always been important to us, and as this year has unfolded, we have been proactive in adapting our plans across hiring, vendor spend and brand media budget—which we are reducing by 94% for the second half of this year—in response to the realities our business is facing. We considered all the tools available to us in adjusting our cost base given the near-term economic uncertainty, and resizing our team for this period of time was a critical step we needed to take. As a result, we are reducing our workforce by approximately 15% of full-time employees, or 137 roles. We are also eliminating a number of hybrid workforce (independent team member) positions.

As with all decisions related to our people, this was one that we undertook with great care. These decisions are primarily a reflection of the environment in which we are operating, and not a reflection of the contributions of our departing teammates. I also want to be clear that these are my decisions, and I hold myself accountable for the path that led us to today. I am aware of the very real impact this will have on our team members, specifically on those of you who will be leaving us, and this weighs heavily on me.

The majority of these reductions are on our Enterprise team. This is not a reflection of our conviction in our Enterprise strategy over the long term. The Enterprise opportunity remains significant.

Beyond Enterprise, we are also eliminating a number of roles in order to streamline operations and drive efficiency in other areas of the business. To be clear, this was not a blanket cost-cutting exercise. Every decision was assessed through the lens of our growth goals, team structures, and business priorities.

What’s next

Knowing these changes are the necessary actions for Upwork today does not make this any less difficult. Empathy and compassion are core to who we are as an organization. This is the day to bring those attributes to the forefront. Please support each other and our departing colleagues in particular.

Hayden

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?

AM I NEXT? NO LOVE AT RACKSPACE HOSTING (07/22/2021)

JULY 22, 2021 — MAJOR RESTRUCTURING WITH A 10% REDUCTION IN FORCE

According to a filing with the Securities and Exchange Commission, the company plans a multi-million dollar restructuring that will result in a major reduction in force, projected to be at least 10% of the workforce over the next twelve months (2021-22). It is anticipated that the majority of the impacted workers will be from the company’s headquarters in Windcrest. Texas.

Approximately 85% of the functions will be transferred to the company’s offshore service centers.

According to CEO Kevin Jones, “The initiatives announced today will enable Rackspace Technology to take full advantage of current market trends, drive significant earnings leverage as revenue continues to grow, and compete even more effectively with other cloud service providers. In addition, we are more closely aligning our Rackers with next-generation service offerings that offer more compelling growth potential both for them and the company.”

“On July 21, 2021, the Company committed to an internal restructuring plan, which will drive a change in the types of and location of certain positions and is expected to result in the termination of approximately 10% of the Company’s workforce. The Company anticipates that approximately 85% of these roles will be backfilled in the Company’s offshore service centers. As part of the plan, the Company also is expanding its internal training program to further develop expertise in cloud services. The rebalance in workforce is a component of a broader strategic review of the Company’s operations that is intended to more effectively align the Company’s resources with its business priorities in high growth areas. Substantially all of the employees impacted by the reduction in force were notified of the reduction on July 22, 2021 and will exit the Company over the next 12 months.”

JULY 22, 2019 — Original post…

San Antonio-based Rackspace Hosting, a cloud development, hosting, and management company owned by private equity firm Apollo Global Management, continues its restructuring/repositioning by transferring 125 quality assurance and support employees to Pune, India-based Tech Mahindra, a business process outsourcer and consultancy, as part of a strategic partnership that appears to be able to compete with Amazon AWS and Microsoft Azure. Since being acquired and taken private by Apollo in 2016 for approximately $4.3 billion, there have been three layoffs of approximately 600 employees. It was rumored that Apollo was looking to take the company public in once again in 2018 to spread the risk and reduce their capital investment.

One cannot help but wonder if these employees will be replaced with Indian counterparts in the coming year?

According to a company spokesperson, “Our partnership with Tech Mahindra is a powerful combination. Their understanding of innovative and customer-centric IT experiences is uniquely complementary to how Rackspace provides a Fanatical Experience. We believe that this will help generate industry-leading technology services and platforms. With 121,000+ associates, working across 90 countries and helping 938 global customers, including Fortune 500 companies, this partnership will allow us to drive far more business impact for our customers.”

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. 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?

THE POLITICS OF TARIFFS

The Politics of Tariffs

First, no matter what the think tanks, pundits, and the government may say, we do not have multi-national or even national free trade or fair trade in this nation. 

What is a tariff?

Technically, a tariff is a government-imposed regulatory device meant to regulate transactions between two parties when some real or imagined inequality or inequity occurs. Therefore, a tariff is nothing more than a tax or fee to be paid on a particular class of imports or exports. 

In reality, a tariff is a tax on the end user who knowingly or unknowingly finds that any tax burden imposed on their purchases is included in the final cost of their purchase. Thus, while tariffs are applied to corporations, they ultimately are paid by the consumer.

In addition to tariffs as taxes, quotas and tax-free shopping may be considered as another type of tariff with more subtle effects. The goal is to create artificial scarcity and drive the price of the foreign product upward to advantage the domestic producers.and

Why do we use tariffs?

Tariffs are a political device that artificially restricts the importation of goods purchased from foreign (non-domestic) producers with the goal of making these goods less price-attractive to corporations and consumers to convey an advantage o the domestic producer. This advantage can be neutral to achieve equivalence with foreign pricing or advantageous to convey supremacy to the domestic producer.

One, tariffs are imposed nationally or internationally to regulate trade so that one party cannot exert systemic supremacy over another. 

Two, tariffs are imposed to redress currency manipulation where one nation maintains an artificially low currency conversion rate to encourage consumers and corporations to buy goods which appear cheaper than those offered domestically. 

Three, tariffs might be imposed to redress the systemic institutional theft of intellectual property which allows manufacturers to avoid the tremendous costs of research and development and pass the cost savings along to consumers as lower prices.

Some examples: 

A primary example would be goods manufactured in a nation with low labor costs and sold for at a lower price in a nation with higher labor costs. Since the higher-cost producer cannot effectively compete in the marketplace, they are forced to innovate new products, reduce their labor costs through automation, expert systems, and robotics; outsource production; or go out of business. 

Another example would be a nation subsidizing some portion of manufacturing, labor, or currency translation costs of a  manufacturer which allows the manufacturer to dump their goods in another nation at a substantially lower price, thus forcing domestic producers to take affirmative action to remain competitive.

Sometimes domestic tariffs are used to protect obsolete and failing business models from legitimate competition. Hence we see commodity goods such as telephone and cable services being sold at premium prices by deliberately designed complexity which creates confusion in the packaging (bundling) of services which permits higher prices.

And, then there is the government's desire to impose taxes on the population in such a manner as to hide them from those taxed. If the government did not collect these taxes in small increments in utility taxes, at the gas pump, or embedded in large luxury purchases, and presented a tax bill at the end of the year -- the populace would revolt and throw most of the politicians out of office.

The current situation.

There is no doubt in my mind that China is a low-cost labor source, having a 900 million person workforce (compared with approximately 140 million in the United States)that works at what Americans might consider slave-labor wages. 

There is no doubt in my mind that China manipulates their currency to ensure that Chinese purchases are cheaper than their corresponding American counterparts.

There is no doubt in my mind that China engages in both governmental and commercial espionage to gain an unfair advantage for their military and commercial ventures.

The possibilities of a trade war?

If one nation retaliates against another, it is most likely the response will be tariffs imposed on that nation's goods; resulting in a death-spiral of tariffs and quotas that may benefit domestic producers in the short- and medium-term, but may be overly oppressive to the consumer who may shop in big-box stores like Walmart, Costco, etc. and have come to rely on lower prices.

Who is hurt?

While the case is made that domestic producers (and their employees) benefit from tariffs and quotas, it is the end consumer that always pays the price. With a disproportionate impact on the poor who have managed their meager budgets using the lower costs goods available in the marketplace.

The Retail Council of Canada claims that an increase in the duty-free allowance for cross-border shopping from $20 to $800 would lead to hundreds of thousands of job losses and cut billions of dollars from the Canadian economy. In this case, common sense reveals that is not so much about jobs since most of the purchases come from sources in the United States, but a loss of tax revenue for a cash-strapped government. <Source>

Another example comes from the Trump Administration's decision to redress artificially low-priced Chinese solar panels, components, and electronics by imposing a 30% tariff on solar products. According to various sources, this may cost the solar industry approximately 23,000 jobs and slow the adoption of clean green energy. Little is being said about the costs to consumers or the government tax revenue windfall.  

Ironically, the second thing subject to the Administration's tariffs was large washing machines. South Korea and Mexico may be among the biggest losers from the tariffs because those countries export the bulk of washers to the United States. Much of the washer production in the two countries comes from Samsung and LG, both South Korean companies. 

Bottom line ...

Tariffs drive political corruption, more massive administrative bureaucracies, and the automation of the workforce. There are no real winners as self-correcting market forces are abridged and inefficient and ineffective government central planning reigns supreme.

Something to watch as an employee if your company operates in tariff-covered industries or depends on lower foreign material and production costs to maintain profit margins.