1 + 2 = -1000
Let me see if I have got the numbers right here:
(1) One of the major banks posted a record profit in 2006, up 11% year over year at the tune of $2.7 Billion.
(2) The outgoing President and CEO had a 2006 compensation plan in the amount of $8.6 Million dollars.
Consequently, the aforementioned bank has decided to lay off 1000 employees.
So by that logic 1 + 2 = -1000
Am I the only one having difficulty understanding this? If you can explain please do. Please also provide your exact address in Shangrila (as Joseph Jaffe would say) as I'd love to visit you.
It was reported in the Financial Post that the cuts will come mostly in "support functions and non-customer areas". The BMO President noted "We owe it to our customers, our employees and our shareholders to have lean, efficient support functions." He further stated, "It is always tough to make decisions that result in job eliminations."
A couple of observations:
Firstly, to suggest that layoffs restricted to support service positions (i.e. administration and technical support) will not affect customer service operations is a wee bit of a stretch. I'm no banking specialist but wouldn't technical support be a key feature for online banking customers? Or be critical in helping a retail branch if their systems went down? The work doesn't go away so someone has to pick up the slack or service suffers. There is no option C.
Secondly, it just doesn't come off well to the 1000 employees being downsized to state 'We owe it to them to have lean, efficient support functions.' Sharedholers may love that kind of talk but employees? I've never heard one employee (besides senior executives) state, 'We need to have more lean operations'. My wife has been a long-standing BMO customer and she's never said, "They need to have more lean operations." Perhaps someone out there has. Why is no one putting their hand up?
Finally, if BMO declared a profit of $2.7 Billion in 2006 and still let 1000 people go, can you imagine the carnage if they ever posted a year over year loss?
I'm not pulling any punches here. The Board of the BMO and Mr. Comper achieved a record profit, were compensated handsomely and still let so many people go? Talk about moxie.
Opinion of one but if you are being paid for doing a great job, then your colleagues should not lose theirs en masse. Otherwise your compensation should be adjusted to reflect your under performance. A one-liner on a press release about 'what a tough decision it was' does not suffice. Actions speak louder than words.
Perhaps I'm being harsh but I expect a lot more from such a respected Canadian brand and company. I also know some fine people who work there. BMO is capable of so much more.
Sorry but 1 + 2 does not equal -1000 regardless of how much marketing or PR you throw at it.
