The recession hits home
Posted by: Chillkram on 28 November 2008
Having watched all year as the 'credit crunch' became an economic downturn and then 'recession' (not officially until after December's trading figures) it has finally felt like a reality this week.
Last week I was called into a meeting at work and told the business was restructuring. I was told my role was no longer in existence but that there was another similar role available that they wanted me to take.
I still had a job, others weren't so lucky.
This week I had to help decide on the futures of 73 people. Across the business 200 people will be losing their jobs. I will have to deliver the news to some of those people.
In my industry all of our competitors are similarly cutting jobs with one of them losing nearly 500 people.
With Woolworths and MFI, two famous High St stores, going into administration this was the week that the reality hit home.
There's an awful lot more to come I think.
Mark
Last week I was called into a meeting at work and told the business was restructuring. I was told my role was no longer in existence but that there was another similar role available that they wanted me to take.
I still had a job, others weren't so lucky.
This week I had to help decide on the futures of 73 people. Across the business 200 people will be losing their jobs. I will have to deliver the news to some of those people.
In my industry all of our competitors are similarly cutting jobs with one of them losing nearly 500 people.
With Woolworths and MFI, two famous High St stores, going into administration this was the week that the reality hit home.
There's an awful lot more to come I think.
Mark
Posted on: 28 November 2008 by garyi
Being reasonably young I have never been through a 'down turn' as some one that could understand it.
What astounds me is the speed of it, and how with the help of the press and the BBC we seem to have talked ourselves into it really really quickly.
Wollies has not even changed its logo since the 70s and deserves a swift death, Sorry to the employees but those on the shop floor will get work no problem.
MFI well, they kind of deserve it, trying to be upmarket with their products and charging eye watering prices, but still calling themselves a name always seen as shite. And they were underhand we went in there for a itchen and got it priced up at £8k, They offered us 5 years interest free. I asked them to sort the price out, they dropped it to £3k but no interest free credit.
I'll admit to being someone who did not take up a new pension after moving jobs because I thought it was all in property. That being said I don't fancy anything right now, haha.
What astounds me is the speed of it, and how with the help of the press and the BBC we seem to have talked ourselves into it really really quickly.
Wollies has not even changed its logo since the 70s and deserves a swift death, Sorry to the employees but those on the shop floor will get work no problem.
MFI well, they kind of deserve it, trying to be upmarket with their products and charging eye watering prices, but still calling themselves a name always seen as shite. And they were underhand we went in there for a itchen and got it priced up at £8k, They offered us 5 years interest free. I asked them to sort the price out, they dropped it to £3k but no interest free credit.
I'll admit to being someone who did not take up a new pension after moving jobs because I thought it was all in property. That being said I don't fancy anything right now, haha.
Posted on: 28 November 2008 by Kevin-W
Mark
If you don't mind me asking, what is your industry?
I work at an ad agency, and we're all feeling the fear (advertising being particularly vulnerable to the downturn). One of our biggest clients has slashed its marketing budget by 70% for next year. The traditional excesses associated with our industry - which, to be fair, haven't been the norm for years - have been well and truly curbed. At our place we all fear scores will lose their jobs next year, and I'm hoping that I won't be one, selfish as that sounds.
Today a friend of mine, a journalist, was laid off with just a month's money. He has a two-year-old son and bought a house last year, at the peak of the market. He is mortgaged up to the hilt and is pessimistic about finding another job which will pay well enough to meet all his outgoings. He's distraught, poor guy. A tragedy, and one that's being repeated up and down the country, and I fear it will only get worse, at least in the short to medium turn.
If you don't mind me asking, what is your industry?
I work at an ad agency, and we're all feeling the fear (advertising being particularly vulnerable to the downturn). One of our biggest clients has slashed its marketing budget by 70% for next year. The traditional excesses associated with our industry - which, to be fair, haven't been the norm for years - have been well and truly curbed. At our place we all fear scores will lose their jobs next year, and I'm hoping that I won't be one, selfish as that sounds.
Today a friend of mine, a journalist, was laid off with just a month's money. He has a two-year-old son and bought a house last year, at the peak of the market. He is mortgaged up to the hilt and is pessimistic about finding another job which will pay well enough to meet all his outgoings. He's distraught, poor guy. A tragedy, and one that's being repeated up and down the country, and I fear it will only get worse, at least in the short to medium turn.
Posted on: 28 November 2008 by Chillkram
quote:Originally posted by garyi:
What astounds me is the speed of it, and how with the help of the press and the BBC we seem to have talked ourselves into it really really quickly.
Wollies has not even changed its logo since the 70s and deserves a swift death, Sorry to the employees but those on the shop floor will get work no problem.
MFI well, they kind of deserve it...
Can't argue with any of this, Gary. Woolies are a relic and are basically the same company they were 99 years ago. Lots of people are 'sad' they are in administration but ask them the last time they actually shopped there and they can't tell you. Adapt or die and they haven't adapted.
However, the weakest will always be the first to go and there are plenty of others in big trouble. There will be some bigger names to go yet I think.
Posted on: 28 November 2008 by Chillkram
quote:Originally posted by Kevin-W:
Mark
If you don't mind me asking, what is your industry?
I'm in tool hire, Kevin.
Regards
Mark
Posted on: 28 November 2008 by mikeeschman
quote:Originally posted by garyi:
What astounds me is the speed of it,
they come on just like storms. you have to remember that storms end. but they don't always show you their worst side first.
a little fear right now isn't a bad thing altogether. a storm should make you fearful.
storms always have victims. scary.
but it will end.
keep telling us how you are doing.
Posted on: 28 November 2008 by Kevin-W
quote:
What astounds me is the speed of it, and how with the help of the press and the BBC we seem to have talked ourselves into it really really quickly.
Gary, so you subscribe to the "Peston's to blame" school then? I don't agree. The boom of the past decade or so has been built on over a trillion quid's worth of personal debt "financed" by grossly overvalued property and false optimism.
It doesn't take much to knock down such a flimsy edifice. And, after all, the media didn't deliberately lend billions to people they knew couldn't pay it back, did they?
Posted on: 28 November 2008 by u5227470736789439
It certainly is scary, but I don't think it has come on all that slowly.
The warning signs have been there for almost two years as reported in the news media, even if the Politicians have not taken much notice [or taken constructive action] until much more recently.
The levels of personal debt in the UK have been no secret and that was always going to end in tears when the storm began, and if anyone thought that the Northern Rock case was going to be an isolated one would have done well to look into the captialisation of other banks at that time.
It was possible even then to see which major UK banks and mortguage lenders might be less secure with a little bit of research.
I have always been excessively careful, having had financial struggles most of my life [though never any debt] and so when I chose an organisation to establish a personal pension, I chose to use a mutualised body [no shareholders] in which to entrust what would be my largest single investment.
In 1996, I decided that the way it was growing [and the pensions with this organisation have been number one or number two for the last twenty or so years] that I could not possibly ever establish a pension pot that would ever do more than pay the Council Tax in my retired years. So for the twin reasons that I could no longer afford to pay in and I had the view that the historical growth in the stock market from 1945 for the subsequent fifty years could possible carry on, I decided to stop paying in! I doubt that I shall ever be able to afford to retire, and so at much the same time I took up smoking with the simple view that I enjoy it, enjoy being with others who smoke, and with luck it will carry off after thirty years from then, which will be when I am retirement age!
Equally, my small banking requirements are with another very well capitalised mutual society.
I suspect that the capitalisation and quality of banks will be a much greater determinant of where deposits may be made in future.
I suspect that before we come out of the current down-turn, then there will be some surprising failures in business. Absolutely no company is guaranteed to get through this.
Whatever else this down-turn is going to be, it is going to be very long. After all all we have seen so far is the splash of rain and gusty wind, but the black clouds on the horizon indicate that the gale force winds will get here before long.
The advice to people to spend and spend, is crazy. There is going to be widespread hardship, and every penny saved now is going to go very much further in a while when most others have none spare at all. Those who have borrowed to the hilt are going to be in the worst possible situation unless they are lucky enough to retain their emploment.
George
The warning signs have been there for almost two years as reported in the news media, even if the Politicians have not taken much notice [or taken constructive action] until much more recently.
The levels of personal debt in the UK have been no secret and that was always going to end in tears when the storm began, and if anyone thought that the Northern Rock case was going to be an isolated one would have done well to look into the captialisation of other banks at that time.
It was possible even then to see which major UK banks and mortguage lenders might be less secure with a little bit of research.
I have always been excessively careful, having had financial struggles most of my life [though never any debt] and so when I chose an organisation to establish a personal pension, I chose to use a mutualised body [no shareholders] in which to entrust what would be my largest single investment.
In 1996, I decided that the way it was growing [and the pensions with this organisation have been number one or number two for the last twenty or so years] that I could not possibly ever establish a pension pot that would ever do more than pay the Council Tax in my retired years. So for the twin reasons that I could no longer afford to pay in and I had the view that the historical growth in the stock market from 1945 for the subsequent fifty years could possible carry on, I decided to stop paying in! I doubt that I shall ever be able to afford to retire, and so at much the same time I took up smoking with the simple view that I enjoy it, enjoy being with others who smoke, and with luck it will carry off after thirty years from then, which will be when I am retirement age!
Equally, my small banking requirements are with another very well capitalised mutual society.
I suspect that the capitalisation and quality of banks will be a much greater determinant of where deposits may be made in future.
I suspect that before we come out of the current down-turn, then there will be some surprising failures in business. Absolutely no company is guaranteed to get through this.
Whatever else this down-turn is going to be, it is going to be very long. After all all we have seen so far is the splash of rain and gusty wind, but the black clouds on the horizon indicate that the gale force winds will get here before long.
The advice to people to spend and spend, is crazy. There is going to be widespread hardship, and every penny saved now is going to go very much further in a while when most others have none spare at all. Those who have borrowed to the hilt are going to be in the worst possible situation unless they are lucky enough to retain their emploment.
George
Posted on: 28 November 2008 by Bob McC
It hasn't been fast. To be in 'recession' requires 6 months of negative growth. We've now got that but it was coming long before that. House prices have been plummeting for over a year now. People were just in denial. It has only just begun and the media far from talking it up have just reported what happened as it happened. If your in a service industry be very, very afraid.
Posted on: 28 November 2008 by count.d
quote:Being reasonably young I have never been through a 'down turn' as some one that could understand it
This downturn has been happening since 2000 and suddenly spiralled down in the last 11 months. In fact, if you want to be accurate, it started in March 2000, when Greenspan started his rate hikes. Property prices have made property owners feel wealthy and we've all been stacking up the debts.
Posted on: 28 November 2008 by Steve O
quote:Sorry to the employees but those on the shop floor will get work no problem.
Care to enlighten us with where they will get this work Garyi?
Posted on: 28 November 2008 by DAVOhorn
Dear All,
A friend of mine recently told me that her grand son who has just finished a Finance degree and was offered a post grad placement with the Millionaires Bank here in Sydney.
Just before ho was due to commence he geta a letter saying due to the current crisis etc etc we cant offer you what we offerres so here is 4 weeks wages in good faith.
What worries me here in Aus , as i am on a temp work visa, is the number of Ausies returning from UK and looking for work. Some bastard might want my job and then it is back to blighty for me.
Woolies and MFI h,mmmmm i hated both shops.
Here in Aus where we have a Duopoly with Woolies and Coles i have to shop at Woolies and their other group shops.
regards David
A friend of mine recently told me that her grand son who has just finished a Finance degree and was offered a post grad placement with the Millionaires Bank here in Sydney.
Just before ho was due to commence he geta a letter saying due to the current crisis etc etc we cant offer you what we offerres so here is 4 weeks wages in good faith.
What worries me here in Aus , as i am on a temp work visa, is the number of Ausies returning from UK and looking for work. Some bastard might want my job and then it is back to blighty for me.
Woolies and MFI h,mmmmm i hated both shops.
Here in Aus where we have a Duopoly with Woolies and Coles i have to shop at Woolies and their other group shops.
regards David
Posted on: 28 November 2008 by Tonepub
So, pardon my ignorance, but did home prices skyrocket in the UK over the last couple of years like they did here in the US?
And did your financial institutions offer quite a few "creative" means of financing homes as well?
Just wondering if it's as wacky over there as it is here. Some areas were not affected too terribly bad, but others like Florida, Southern California, Arizona and Las Vegas got hit pretty hard.
We sold our house in Phoenix five years ago for $300k and were glad to get out when we did. We watched our house then go up as high as $529k a couple years ago, and now it's back on the market again for $289... Pretty shocking. I have a few buddies in S. Calif that have seen their houses go down about 40% over the last 18 months.
And did your financial institutions offer quite a few "creative" means of financing homes as well?
Just wondering if it's as wacky over there as it is here. Some areas were not affected too terribly bad, but others like Florida, Southern California, Arizona and Las Vegas got hit pretty hard.
We sold our house in Phoenix five years ago for $300k and were glad to get out when we did. We watched our house then go up as high as $529k a couple years ago, and now it's back on the market again for $289... Pretty shocking. I have a few buddies in S. Calif that have seen their houses go down about 40% over the last 18 months.
Posted on: 29 November 2008 by MilesSmiles
My house is in South Florida and the rollercoaster is even more extreme. But I like the house and will keep it for another ten years - no problem unless you took a zero down, interest only, don't care for your credit rating mortgage ... that should have been the final warning signal for all of us.quote:Originally posted by Tonepub:
So, pardon my ignorance, but did home prices skyrocket in the UK over the last couple of years like they did here in the US?
And did your financial institutions offer quite a few "creative" means of financing homes as well?
Just wondering if it's as wacky over there as it is here. Some areas were not affected too terribly bad, but others like Florida, Southern California, Arizona and Las Vegas got hit pretty hard.
We sold our house in Phoenix five years ago for $300k and were glad to get out when we did. We watched our house then go up as high as $529k a couple years ago, and now it's back on the market again for $289... Pretty shocking. I have a few buddies in S. Calif that have seen their houses go down about 40% over the last 18 months.
Posted on: 29 November 2008 by u5227470736789454
Same issues for me, we found out 1 month ago that 25% of the workforce ( 6000 people ) will be made redundant, we find out on the 8th of December with everyone affected to be gone by the 31st December - Merry Christmas and a Happy New Year ?
Barrie
Barrie
Posted on: 29 November 2008 by Lontano
My thoughts are with all who find themselves in this difficult position at this challenging time. We are going through the same at work with 7,000 positions being eliminated, about 10% of the workforce. For some people, it is great news as they want to try something new and take a nice pay cheque with them but for the majority it is a very stressful and concerning situation. Our big day in my area of the business was a few weeks back and I survived, others was not so lucky.
There is no easy way of taking a livelihood away from someone, but I will say our company approaches it in the most respectful and supportive way possible.
There is no easy way of taking a livelihood away from someone, but I will say our company approaches it in the most respectful and supportive way possible.
Posted on: 29 November 2008 by Huwge
quote:Originally posted by avole:quote:I will say our company approaches it in the most respectful and supportive way possible.
Sorry, Lontano, I don't mean to sound disrespectful but what rubbish. The only way to be supportive is to keep people on, not sack them. It's always the employees who count, not the shareholders who are the reason why companies sack people in the first place.
...must be nice to work for a company that does not rely on shareholders for capital
Posted on: 29 November 2008 by BigH47
PD??
Posted on: 29 November 2008 by u5227470736789439
= please delete. [For the attention of Adam].
Posted on: 29 November 2008 by BigH47
OK I expect I missed that information.
Thanks George.
Thanks George.
Posted on: 29 November 2008 by Chillkram
quote:Originally posted by avole:
This thread really pisses me off.
So MFI "deserve it" do they? Woolies should "adapt or die", should it? Who gives a fuck about the employees, they'll "get work, no problem", will they?
I think some posters should go onto ebay and try to find themselves new brains. Clearly their current models, if any, aren't working.
I think you should be careful with the personal insults without fully understanding what people are talking about. You may well be 'pissed off' but have a thought before you post.
I'm sorry you lost your job - I thought I was going to lose mine last Thursday. I feel lucky that I managed to keep a job - for now. I now have to deliver bad news to many people I consider as friends just before Christmas.
But I think you miss the point. If companies do not adapt to changing markets they will fall by the wayside whether you like it or not. This is a natural law. Just like evolution.
The bald facts are that if money is not coming in the door, companies will cut costs to survive, much the same as any household has to do if their income drops.
quote:Sorry, Lontano, I don't mean to sound disrespectful but what rubbish. The only way to be supportive is to keep people on, not sack them.
This would be great. Unfortunately, in many cases if companies do not lose some staff they run the risk of going under and making all of their employees jobless. Like the 30,000 at Woolworths.
Posted on: 29 November 2008 by Gary S.
Mark
Sorry to hear your woes, even though you are one of the lucky ones, I don't envey you having to give the news of redundancy to work colleagues and as you say, it always seems even worse at this time of year.
I am a director of a surveying company and as you might expect, we have also seen our workload severely cut, but fortunately, we were understaffed leading into this (ironically, we just couldn't find decent staff only a short while back!) so at pressent, we are coping, but if things don't pick up after Christmas, I can see a situation where we may have to cut our workforce and it's the thought of having to give the bad news that I dred more than anything. Although I employ these people, I think of them more as freinds than employees.
To avole, I know what you mean about supporting people, but trust me, if you run a business, there is only so long you can go on before you have to shed staff, if there's insufficient money coming in to cover the wage bill, then there's only one place that business is gong and then everybody is out of a job, simple economics I'm afraid.
Good luck eveybody!
Gary
Sorry to hear your woes, even though you are one of the lucky ones, I don't envey you having to give the news of redundancy to work colleagues and as you say, it always seems even worse at this time of year.
I am a director of a surveying company and as you might expect, we have also seen our workload severely cut, but fortunately, we were understaffed leading into this (ironically, we just couldn't find decent staff only a short while back!) so at pressent, we are coping, but if things don't pick up after Christmas, I can see a situation where we may have to cut our workforce and it's the thought of having to give the bad news that I dred more than anything. Although I employ these people, I think of them more as freinds than employees.
To avole, I know what you mean about supporting people, but trust me, if you run a business, there is only so long you can go on before you have to shed staff, if there's insufficient money coming in to cover the wage bill, then there's only one place that business is gong and then everybody is out of a job, simple economics I'm afraid.
Good luck eveybody!
Gary
Posted on: 29 November 2008 by Stephen Tate
I must admit that as a builder times are extremely hard.
I have had to take two significant wage cuts in the last three months and am just... managing to stay in work.
I really hope this down turn isn't prolonged!
Steve
I have had to take two significant wage cuts in the last three months and am just... managing to stay in work.
I really hope this down turn isn't prolonged!
Steve
Posted on: 29 November 2008 by Chillkram
quote:Originally posted by avole:
Gosh, did you learn how to be patronising, or did it come naturally?
More personal insults?!!!
First my brain isn't working and now I'm patronising?!!
Can you sustain a debate without resorting to personal attacks? Actually I say sustain, I think they emerged in your very first post on the subject.
I gather you wouldn't need an opponent in order to start a fight.
Posted on: 29 November 2008 by u5227470736789439
Company failures in the near future will have nothing to do with the quality that they may purvey.
One of the best makers of cars was founded by WO Bentley in 1919. It failed in 1931, and yet the quality that had been established allowed to marque to survive even till the present day as IMO the greatest car yet made, owned in the interval by Rolls Royce [with Vickers later] and now by the best current maker, the Porshe/VW growp.
In a consumer society we erect a real superstructure of luxury marques, which allows for blatant consumerism. But when the chips are down the analogy with a ships superstructure is apt. Things become top heavy and when instability is found, capsize follows.
The essentials become essential again. Advertizing, estate agencies, makers of luxury items, [etc.], and even makers of what we might think of as bread and butter items, are suddenly seen as what they are. Dispensible in terms of personal expenditure. I guess the only unavoidable service is that of the undertaker ...
The greatest earnings tend to come in the ultimately dispensible occupations, and these will be the first to be savaged by the current crisis, which has barely started.
Of course there will be weak dynosaws like Woolies, and that is no fault of their workers, shortly to be hunting jobs that will evapourate faster than the Iraqi army after that country fell to the USA/UK invasion. Anyone who thinks this is going to be easy is kidding themselves.
But the good news is that this steam roller has no favourites. To be in a fix is not going to be seen as socially unacceptable, as it has been during the good times. I have been in a fix for a long time, and so am ready for whatever may come, but no one need feel secure, except undertakers ...
George
One of the best makers of cars was founded by WO Bentley in 1919. It failed in 1931, and yet the quality that had been established allowed to marque to survive even till the present day as IMO the greatest car yet made, owned in the interval by Rolls Royce [with Vickers later] and now by the best current maker, the Porshe/VW growp.
In a consumer society we erect a real superstructure of luxury marques, which allows for blatant consumerism. But when the chips are down the analogy with a ships superstructure is apt. Things become top heavy and when instability is found, capsize follows.
The essentials become essential again. Advertizing, estate agencies, makers of luxury items, [etc.], and even makers of what we might think of as bread and butter items, are suddenly seen as what they are. Dispensible in terms of personal expenditure. I guess the only unavoidable service is that of the undertaker ...
The greatest earnings tend to come in the ultimately dispensible occupations, and these will be the first to be savaged by the current crisis, which has barely started.
Of course there will be weak dynosaws like Woolies, and that is no fault of their workers, shortly to be hunting jobs that will evapourate faster than the Iraqi army after that country fell to the USA/UK invasion. Anyone who thinks this is going to be easy is kidding themselves.
But the good news is that this steam roller has no favourites. To be in a fix is not going to be seen as socially unacceptable, as it has been during the good times. I have been in a fix for a long time, and so am ready for whatever may come, but no one need feel secure, except undertakers ...
George
Posted on: 29 November 2008 by Chillkram
quote:Originally posted by Gary S.:
it's the thought of having to give the bad news that I dred more than anything. Although I employ these people, I think of them more as freinds than employees.
Exactly Gary. I have done it before and it never gets any easier. I have employed many of them and also consider some of them as friends. With it being just before Christmas too I am not looking forward to it. I have been made redundant before and probably will again at some point. I am not naive enough to believe that this more than a just stay of execution for me if things don't improve.
Like you, my industry, relies somewhat on the construction/housing industry and we have felt the ill winds blowing for some while.
This downturn feels a little different from others though, as the modern economy is so much more dependent on credit than previously.
It could be deep and dark I'm afraid.