Facebook has gone public. Now, the media, which had touted the IPO as the next big thing, is focusing on the IPO and Morgan Stanley and how the whole thing was mishandled. Facebook is also being sued by some of its primary stockholders for lying about its lackluster growth. Main Street needs to get together and kick Wall Street’s ass.
For the last four years, the U.S. and most of the world spiraled into a near-depression thanks to Wall Street gambles and questionable moves by big banks and investment firms. Did I hear someone say, Lehman Brothers?
I can still remember President Bush saying in 2002 how more Americans owned their homes, and how we needed to open the market to make homes affordable to minorities and blah, blah, blah. None of this is a problem for politicians because they’re usually out of office by the time the repercussions begin to manifest themselves. Now, as we suffer for Bush’s policies, we blame the current administration.
But that’s not quite the point of this blog. Let’s look at Facebook. Just about everyone’s on the damn thing, and it seemed like the IPO was going to be a big deal. So it wasn’t, and it wasn’t the first time an IPO fizzles out. But since most people have a Facebook account and the media played it up as the next big thing, we’re all connected and watching to see what happens next.
Remember all those changes to Facebook we all hate, like “Timeline?” Well, now, Mr. Zuckerberg and his company will have to listen to the stockholders. Most publicly traded companies have a clever way to please the stockholders: layoffs. So in the future, when Facebook stockholders look at their little piece of the social media pie and wonder about their profits, they’ll demand from Mr. Zuckerberg or anyone else in charge, that something be done. That something is layoffs.
That’s how it’s done in America. If the stockholders want their capital gains, the workers will suffer. Forget making a better product, or listening to what the customers want, or experimenting with innovation. The quickest, surefire bet for maximizing short-term profits for the stockholders is to layoff staff.
We don’t need to look very far. Since the mid-seventies America’s “Big Three” car companies have relied on layoffs to maximize profits instead of building better, more reliable and economical vehicles. And look at newspapers. Just about every single media company in the U.S. has had layoffs in the last five years. Today the New York Times ran an article about the New Orleans Times-Picayune heading for layoffs.
After the corporatization of the media, layoffs became the norm. Newspapers and magazines lay people off as if they were taking down ornaments from a Christmas tree. Profits grow slightly because of these “cost cutting” measures, but soon the tree will have no ornaments left. I worked at a newspaper that actually made a profit, but when it did not make enough, the layoffs came. While much of the staff had to leave the paper, management stayed on. I guess that’s what management does. Still, the quality of the newspaper is much worse, but it doesn’t matter to them, because the stock went up.
Now, even companies in the tech industry that are not moving fast enough, are going to suffer the same fate as slow moving newspapers. Hewlett-Packard is getting ready to lay off almost 30,000 employees. Hello profits!
As Facebook moves forward, it will need to appease its investors’ hunger for profits. If the plan to sell Facebook-user information and targeted advertising space does not help stock dividends, investors will demand layoffs. Just as it happens with most public corporations, layoffs are a quick, easy fix. People are always expendable when it comes to profits.