Blackflag, I have a feeling it's the latter of what you said. I recall some of the aquisitions they made over the past few years. I also think that profits from their sports division fell pretty sharply.
Again, no qualms with HKS. They are a world class shop obviously and they have some outstanding senior staff there. I remember interviewing there and thought the guys there were class acts.
med - it's important to remember that these current economic conditions swept over our profession like a tidal wave, without much warning. the swiftness with which business conditions deteriorated was both stunning and paralyzing. the problems we face as a profession are global in nature and arose due to bad governmental policy and a near meltdown of our financial system last fall.
even extraordinarily well managed firms (like HKS) didn't (could not) see this coming and most were relatively powerless to rapidly counteract the sudden, and precipitous, decline of revenues.
I agree with blackflag and BlueGoose. If you look percentage wise HKS's drop is similar to many other firms. It just looks/seems bigger because they employed so many more people.
it is naive to say that this happened without any warning. if you are following construction costs since Katrina and the wars, real estate weirdness (for want of a better word - loans for $500K to folks making $25K for,,, and really because there was nowhere else to move to), and the f#cking cost of living when you include fuel & food (OK, this is only for the US, but the US economy is a global indicator), you will understand the cave-in across all sectors. I am no economist but I kind of figured this out in about 2006, when I was trying to work out the fiscal benefit for the EIS of a project that simply could not be defended).
I was happy to hear that Toll Brothers, of all people (god bless them for supporting the metropolitan opera broadcast), had in 2.5% uptick in their stocks. I hate their projects, they are really part of the problem, but where Toll Bros. goes, so goes the entire freaking construction industry and the designers that they need (admittedly Toll Bros. is probably using designs that some intern, happy to be getting minimum wage, cranked out 10 years ago... but it is a start).
just to correct some info posted above: gensler has laid off over almost 1100 people since last summer...but that's around 33% (not 50%) of their former staff (they still employ 2200);
Even if you saw it coming, what were you going to do? Downsize BEFORE you needed to? Architectural firms grew in response to construction demands. It made business sense to grow when there was a demand for work. Usually, though, astute firms could see what sectors were going to be slow and what sectors would still be building, and shift marketing directions.
That did not work this time. EVERY sector has been hit, even the usually recession proof "ED's and MED's." Hospitals and colleges saw their endowments slashed, and even they stopped building. Unless you are doing bridges, roadwork, government structures or affordable housing, you are sunk right now.
archie,
you are totally on target... what could anyone (small firms/large firms/commercial/residential/etc..) have done? It just seemed so obvious what would happen, but it was like a sinking ship. You are hanging onto a life preserver, but you know the icy water will kill you anyway.
I thought I was more or less safe because I worked as an all-but-licensed landscape architect in an engineering firm that had a great diversity of public projects (and yes, roads and bridges), but our residential subdivision clients dropped off and the municipal clients were cutting back on "amenities" - you know, shrubs, curbs, sidewalks, grass - so the firm I was with decided to cut back on landscape architect types.
Sorry I am so cranky, it has been just a miserable 6 months (and if one more person says "oh you must enjoy having the summer off," I will kick them).
eranthis....I concur about people assuming that we enjoy our time off or "I bet you're spending quality time with your kids"....nah, my kids may be young, but they're smart. Daddy needs to be working and making money. Not our chaperone, chauffer and chef. My son thinks w/ my experience as a designer, I'd kick ass at the newly opened Lego Store. He just wants me to get the employee discount......
Feeling cranky about the situation is far better than being comfortable with it. Hang in there and good luck to you....
I feel like the only people who preach that kind of rubbish are idealistic wannabe-hippy trustfund babies who know absolutely nothing about the real world.
And I've known a lot of these people and worked with them in previous lives. They are simply insufferable.
don't let the moss grow on ya, keep doing something, trying is better than dying. ok, i'm out of folksy sayings, i can't channel my departed southern kin's wisdom at the moment - but will say, hang in there, damn it!
I'll tell you a bit about what the firms COULD HAVE done... and this is personal experience from the firm I work for...
In my opinion, for one large international firm: one layoff is an economic stumble, two layoffs is an economic reevaluation of your overall budget, and three layoffs is an economic crisis in which you need to reevaluate the entirety of a budget for every single office location (worldwide).
For instance, my firm had it's third layoff late April/early May. Less than two months later... brand new i-phone 3GS for every vice president, principal, and (nearly) every associate. Wow. How about you just come in and slap us in the face. Every associate (mind you, associates do not hold the responsibilities in my firm this might hold in say a mid-sized firm) still has firm paid parking- and in a big city this is $250/month per employee. And then there came the Inter-firm "awards" which hold bonuses upwards of $10k for essentially doing the job you're supposed to be doing anyways.
At the same time, they cut 401k contributions, no bonuses, no raises and there have been three layoffs on a massive scale internationally.
Don't get me wrong, I'm not saying perks should be nixed forever. I AM saying that there are things they SHOULD AND COULD be doing - ie. give out the awards, take a hit on the bonuses, get rid of the free parking for associates, and WTF on the iphones. Don't even get me started on our brand spanking new office space where every desk is equipped with ridiculous light fixtures that were $300 a pop- and do shit for lighting.
I have no doubt there will be another layoff before the end of the year. And I won't hesitate to blame that on management at that point- and know full well more could have been done.
interesting....
some of those items do seem frivolous in light of today's circumstances. But, at the same time it seems on par with the heart burn over wall street bonuses. cutting those expenses would probably be more of a symbolic gesture than anything else.
If you averaged the lowest paid intern to the highest paid associate, each head costs the firm an average of 5k a month in salary/benefits.
So not buying 100 (20k worth) iphones equates to about 4 people keeping their jobs for one more month. The parking sounds like a good cut, but then again they have to do something. A monthly bus pass is probably 100 per month. So the cost is reduced to 150 per month/1800 per year per head vs. of 250/3000. for 100 people that is a net savings of 120k or 2 employee salaries for the year.
So out of a hundred employees we've managed to save 2-3 yearly salaries by doing without. That's 2-3% of the work force. Emotion aside, it doesn't really seem significant in light of the 50% layoffs we've seen at large organizations.
I wonder if no new iphone, crappy lighting, and no parking would do more to hurt moral than letting a few people go... I guess this is the gamble they are playing with.
cadcroupier - Why do they need to provide parking or transportation passes at all? From my reading this is only provided to the top brass or tip top brass and not the lowly interns and project managers, whose transportation expenses make up a larger component of their salary. Are you suggesting that it is fine to make the intern or project manager pay for parking or take the bus, but it is wholly unreasonable to make the principal or studio manager who makes 10x as much do the same thing?
Also, of the things mentioned, only the lighting seems to affect the office drones (for whom good morale is essential in keeping output high). The iphone and parking only affect upper management, who frankly should be able to pay for their own phone service or make do with a slightly older phone and pay their own transportation to and from work. I think a more distributed workload and less output pressure is better on the staff as a whole for morale than making sure that management has their pampered perks.
just random scattershooting here in regards to the informative posts by +1 and cadcroupier and not directed to them or really anyone in general....
- iPhones: Could you do biz w/o one? Concerning my ex-firm, I didn't have a problem with managing principals having the gadgets. Now some members of management had these toys, though I hope they weren't being paid for at the associate level (lowest rung). But who knows.
- Parking: Working near downtown, i.e. "Uptown" is just like being downtown. "Free" parking is hard to find - especially when dealing with the construction guys for the several nearby mid to high rise projects. Try getting to work by 6AM to get a street spot. Not fun when you may have been up until 12AM working on a project. Also for my former firm, the multi-level garage was right there - to not use it would have been a waste of space and off-site parking was greatly reduced the last year and half due to a large mixed-use project that sits on a former mega-lot.
- Bonuses: First of January it was announced no bonuses. In light of the loss of good employees in the second round of layoffs, that was accepted. But what happens at the end of the year when there is a profit? Though I'm not there any longer, I hope the remaining employees get something extra (and not just a holiday ham or turkey)....You know there will be a profit - might as well give it to those that were working double time after all the staff reductions.
- Continuing Ed/ Training: Ok, this is something that is still a complete mystery to me. Revit training. I knew several people that went through the week long course only to be let go in the next round of layoffs. Or the MBA/PM training seminar I was in for a week, paid for by the firm - in fact I was instructed to attend along w/ 30 other associate level and higher employees. Some of us were let go. If you think you're going to layoff certain people based on salary and workload, wouldn't you NOT put them through training?
- LEED: Big push to get LEED certification prior to the revised standards in April (?). Some had to have been let go - this was an investment on the firm's part. But that investment walked out the door.
All the little things begin to add up. Yes, cutting salaries is the easy way to get out of the red, quickly. But what about all the "extras" - that walked out the door? I was never asked to take a pay cut, though in hindsight would have taken it w/o blinking. Others in similar positions felt the same way. If we could not layoff but reduce our wages, so be it. Like a big family, we wanted to look out for one another. We didn't like our co-workers being let go because they are part of the team, you trust them, you know they know what's going on.
cad...imho, the moral is waning at a lot of firms because of the loss of co-workers. Losing a perk or gadget, may be a bummer today, but if it insures less staff reductions, I believe most would take it.
I'm not defending the firm by an stretch or saying these "perks" are necessary things.
My point was solely that these "perks" mentioned above really don't amount to much in the grand scheme of things. By cutting everything mentioned they can retain 3-4% of the work force. Maybe less if you take into account the tax benefits of these sorts of write offs.
Will switching to Ikea task lights and foregoing the Aeron chairs save a head or two? maybe. Are people more productive and willing to work late if they have a paid parking spot? maybe. If the firm only has to cut say 20 vs. 25 will the increased office morale offset the loss of these perks? I don't know.
Its intangible. These things are hard to measure other than anecdotally. I guess firms have to sort out the balancing act between salary/bonus/perk/morale. Some are probably more successful than others at this.
But to think that by foregoing iphones, upgraded lighting, and things of that nature are going to save a firm from 3 rounds of layoffs is sort of not seeing the forest for the trees.
dudes the world is upside down at the moment....take the oppurtunity to be in the right place at the right time. Those who know have an understanding of the latest architectural software will prevail....be it in the drawing room....be it in the board room. Those who are willing to take a risk will destroy the old guard! Rise up young ones....rise up as it is your time.
I understand, not trying to disagree with you. I thought my former firm's "means & methods" were unique but after reading your post, this is not the case; we have some common experience. Yes, intangible but still a reality. As for 3-4% of staff - in my experience this could be 43 to 58 employees - that's a lot. Any way what's happened has happened; there's no magic time machine to hop in a go back to the good times. It's tempered me and made me tougher, I'm more skeptical.
I won't begin to estimate what # of jobs would be saved if they seriously reevaluated the budget at every location. Whether minimal or not, it almost becomes irrelevant. Even if they did all of those measures and could save just ONE job... it's about the psychological effect those measures would have meant. If I knew the executives had done everything they could- it would mean they thoroughly evaluated every aspect of operating costs and cuts- whether you're on the bottom rung or the top step... you would know everything that could be done had been done to save as many jobs as possible.
Don't you think that those of us who are left are watching every single move management makes very closely? Do you not think we are preparing for what we will do- or where we will go next when the economy turns around? We are not dumb, the economy will rebound again and it will fall again. And when it rebounds don't think that just because you saved the iphones and paid for my LEED exam that I'm going to stick with you. Because you got rid of staff I needed the most at a time when we needed to make sure the project was completed in the best way possible- all because you didn't want to give up parking priviledges.
P.S.- it's not 100 iphones, as was suggested above. More like 1,450. Even at a discounted rate, you're looking at $200k+ Oh and don't forget the plan costs every month. Even with a corporate discount, you have to remember these people are traveling internationally and incurring international plan charges. Multiply that by 1,450 people every month.
A few more numbers...
10 interfirm awards at $10,000 prize each= $100,000
Parking for 150 employees at office #1 @ $250/month= $37,500
Multiply parking by 8 office locations in the US= $300,000
Iphones= $200,000 (this is a very modest number)
Lighting= $75,000 (most don't even get used, since there's less people to use them)
New office in a LEED platinum building... any guesses?? I would say in the neighborhood of multi-millions
Without calculating a number for the office space I'm getting $700k+
If you're a realist and that's a modest number, you're probably closer to $1mil, especially when you add in the iphone plans.
So a million dollars is chump change. I guess we're all chumps.
why don't we eliminate computers while we're at it ... hardware and software are really expensive and there'd be lots more work to go around if we went back to manual drafting ...
come on people ... there are costs associated with doing business efficiently. but, if you don't have any work for people to do, you can't (and shouldn't) pay their salaries.
File, we wouldn't want to exaggerate now would we? All people like +i, blackgflag, and myself are saying is that we notice a lot of things companies can save money on.
Another thing I noticed that my former office had four company cars -- there were only 50-some people there! They were hybrids and it was very rare when people used them.
file - why don't eliminate the jobs in the usa, ship them to mexico, india, etc. where labor is DIRT CHEAP??? That way the heads can have their sweet gadgets, toys and perks - and 'git er done' by the end of the day! WHOOOOO-YEAH!
Yeah, I know there's a price of doing business. Amongst my fellow associates we were willing to take a pay cut if it meant reduced reductions in staff.
What I was pointing out at my recent employer was how they'd spend money on employees to be trained in Revit or PM/MBA caliber courses and then lay them off a week or few months later. How the hell is that "doing business"? I call it the left hand not knowing what the right hand is doing and vice versa. THAT'S FREAKING INEFFECIENT!
med. - you brought up holiday parties, i think ours was six digits. It's not just the "party". It was also company workshops and bringing in staff from other offices (US and international). Last Fall, there had been rumblings after the first layoff, that maybe we should forgo or constrict the parties to just an office by office basis. The ceo said, "no" we shall do what we've always done. The company "pep rally" the day before is no small event - it's a production and done well. I think you can find part of it on youtube. I wish I had more to drink at the party....
Company cars - i once worked at a firm that gave principals an allowance for autos. These were usually deemed to be "company cars" that each team in the firm could use for business purposes. When the blood of the firm (son of the founder) retired, this slowly changed. Team principals started using the allowance to buy autos that they used, not that could be used by their employees. Sucks to have a project in East Texas that your PM will not sign off on your mileage because you had to use your own vehicle, but the team principal won't let you use the "team car". We were down to one company car that was fought over by 5 teams. But that was another firm from my past - not to be confused with my tenure with the recent establishment.
I don't envy management right now that has to make the tough decisions between cutting pay/benefits/perks or widespread layoffs. From my "in the trenches" view I can name very productive people that got the axe and some not so productive people that are still working. In that sense I'd rather the firm make other cuts to save staff. Then again, what good is it to pay people to sit around and surf YouTube all day?
In a sharp downturn cutting everything to the bone is only a stop gap. If things don't improve you still have to layoff people before the firm is in the red and risks shutting the doors for good. I personally have seen several cuts - pay, perks, bonuses, 401k match, etc. I've also been told how many jobs each cut saved. Right now we are so thin I just worry the firm is too optimistic of a quick turn around.
Yes, I think management (principals especially) haven't taken enough cuts personally to adequately enhance morale and "share the pain." Porportionality is key here and any intern knows that his 15% cut is more than the pricipal's 20% cut. At one local engineering firm top management took a 50% pay cut to show "solidarity" with their staff in this time. That's impressive.
Talking amongst friends it does seem like there is an attitude within top management at arch firms that production/design staff should just be "happy to have a job" right now regardless of whatever cuts are imposed upon them. Not surprisingly, this thread is filled with that angst coming out. I'm not counting up how much the bosses Blackberry costs, but would agree there is always room to build that solidarity between staff and management.
The principals at a friend's firm took paycuts to keep from reducing staff. This helped morale - but the bottom line is you must have projects to work on. They didn't and now they've had to layoff.
Some will argue about the perks and extras - these are overhead expenses in my opinion. Yes, cutting these may save some jobs but the bottom line is getting new or repeat business. This is something that's just not happening at a frequency to maintain the employment like we once knew.
It's not an all or nothing response. It's very simple. When you have had three rounds of layoffs within your company, perhaps it's best to stop expenditures that are not improving the bottom line. Evaluate the budget on an office by office location. The cuts are not forever- just like stopping raises, promotions, or 401k contributions are not forever. But come on, it's not an all or nothing. If you keep it all you WILL end up with nothing.
as much as it sucked, he said hks was very professional with him, gave him a decent severance, helped him with unemployment and insurance questions, offered references and projects on disc at his request, and to stay in touch with HR with regards to any questions.
apparently this is like his 7th layoff, he's been in the industry over 20 years - his other layoffs from smaller firms, he said they threw him out like the garbage. this did not happen at hks, they did not "escort him out" like other large firms.
i asked him why he's still in it, he just said "...it's is what i do". not sure what that means, but he looked very relaxed.
xaia: i hope he finds something soon. i had the similar experience with my "exit". as much as i may criticize them; i was treated as humanly as possible. severance was generous considering what some of my friends from other firms received. the hr staff was flexible and friendly, to say the least. you can tell they really don't like doing this - neither do the managers, but the hr people are around when you pack up, not hovering/monitoring. just around if you need a box or cart to move stuff. it's uncomfortable for all involved, even the security guard at the front desk looked unhappy about the situation.
"I think management (principals especially) haven't taken enough cuts personally to adequately enhance morale and "share the pain."
Just to put this into a broader perspective, earlier this year our firm's principals took ZERO pay for 9 weeks while we struggled to get our heads around the economics of the practice and how many people we could afford to retain - none of our staff gave up a penny during that period of time. Since then, our principals have not repaid ourselves the amounts we weren't paid, plus we've taken 35% paycuts against our normal salaries.
my point is this - and I'm reinforcing cadcroupier's thoughts above - most of the items you guys are bitching about really don't make a material difference with respect to the number of people who can be retained or must be let go. sure, those expenses may be visible and politically objectionable, but they don't make a real difference.
we are in a personal service business and payroll (and payroll related costs) makes up the vast majority of our cost structure. sure, you can cut out a $200 iPhone to be "PC" but it's not going to save a single job and it might make the person responsible for business development just that more inefficient.
follow the "real" money and you'll understand why firms can't keep people employed when there's no revenues to support their continued presence in the firm. this is not about being "nice" or "mean" -- it's about survival
med - i can speak for my studio... things picked up between june/july. then slowly the three projects we *thought* we had all disappeared one by one. the rest of the firm is slow as well.
Sucks +i, last I heard things were solid over there in June and July -- I was hoping that would last a long time.
Believe it or not, we went though our first round in late July. We lost 5 people (we are about 300) but they were mostly draftspeople who didn't have architectural backgrounds and they had been billing to overhead for a long time. It would seem there is a very lengthy process in laying people off here -- I heard it was about 4-month decision-making process.
med. - that's pretty good that your firm's first round was in july and it was only five individuals. you may have said before, but i don't recall, what project types are your firm's bread/butter?
Layoffs....layoffs......
Blackflag, I have a feeling it's the latter of what you said. I recall some of the aquisitions they made over the past few years. I also think that profits from their sports division fell pretty sharply.
Again, no qualms with HKS. They are a world class shop obviously and they have some outstanding senior staff there. I remember interviewing there and thought the guys there were class acts.
med - it's important to remember that these current economic conditions swept over our profession like a tidal wave, without much warning. the swiftness with which business conditions deteriorated was both stunning and paralyzing. the problems we face as a profession are global in nature and arose due to bad governmental policy and a near meltdown of our financial system last fall.
even extraordinarily well managed firms (like HKS) didn't (could not) see this coming and most were relatively powerless to rapidly counteract the sudden, and precipitous, decline of revenues.
I agree with blackflag and BlueGoose. If you look percentage wise HKS's drop is similar to many other firms. It just looks/seems bigger because they employed so many more people.
it is naive to say that this happened without any warning. if you are following construction costs since Katrina and the wars, real estate weirdness (for want of a better word - loans for $500K to folks making $25K for,,, and really because there was nowhere else to move to), and the f#cking cost of living when you include fuel & food (OK, this is only for the US, but the US economy is a global indicator), you will understand the cave-in across all sectors. I am no economist but I kind of figured this out in about 2006, when I was trying to work out the fiscal benefit for the EIS of a project that simply could not be defended).
I was happy to hear that Toll Brothers, of all people (god bless them for supporting the metropolitan opera broadcast), had in 2.5% uptick in their stocks. I hate their projects, they are really part of the problem, but where Toll Bros. goes, so goes the entire freaking construction industry and the designers that they need (admittedly Toll Bros. is probably using designs that some intern, happy to be getting minimum wage, cranked out 10 years ago... but it is a start).
just to correct some info posted above: gensler has laid off over almost 1100 people since last summer...but that's around 33% (not 50%) of their former staff (they still employ 2200);
Even if you saw it coming, what were you going to do? Downsize BEFORE you needed to? Architectural firms grew in response to construction demands. It made business sense to grow when there was a demand for work. Usually, though, astute firms could see what sectors were going to be slow and what sectors would still be building, and shift marketing directions.
That did not work this time. EVERY sector has been hit, even the usually recession proof "ED's and MED's." Hospitals and colleges saw their endowments slashed, and even they stopped building. Unless you are doing bridges, roadwork, government structures or affordable housing, you are sunk right now.
archie,
you are totally on target... what could anyone (small firms/large firms/commercial/residential/etc..) have done? It just seemed so obvious what would happen, but it was like a sinking ship. You are hanging onto a life preserver, but you know the icy water will kill you anyway.
I thought I was more or less safe because I worked as an all-but-licensed landscape architect in an engineering firm that had a great diversity of public projects (and yes, roads and bridges), but our residential subdivision clients dropped off and the municipal clients were cutting back on "amenities" - you know, shrubs, curbs, sidewalks, grass - so the firm I was with decided to cut back on landscape architect types.
Sorry I am so cranky, it has been just a miserable 6 months (and if one more person says "oh you must enjoy having the summer off," I will kick them).
eranthis....I concur about people assuming that we enjoy our time off or "I bet you're spending quality time with your kids"....nah, my kids may be young, but they're smart. Daddy needs to be working and making money. Not our chaperone, chauffer and chef. My son thinks w/ my experience as a designer, I'd kick ass at the newly opened Lego Store. He just wants me to get the employee discount......
Feeling cranky about the situation is far better than being comfortable with it. Hang in there and good luck to you....
Time Off = No money.
What exactly is there to enjoy about that?
I feel like the only people who preach that kind of rubbish are idealistic wannabe-hippy trustfund babies who know absolutely nothing about the real world.
And I've known a lot of these people and worked with them in previous lives. They are simply insufferable.
Agree med. and if I can add to the equation:
unemployed = no $$$ / mortgage = no home
as the late/great D. Boone of the minutemen sang:
"this ain't no picnic"
don't let the moss grow on ya, keep doing something, trying is better than dying. ok, i'm out of folksy sayings, i can't channel my departed southern kin's wisdom at the moment - but will say, hang in there, damn it!
I'll tell you a bit about what the firms COULD HAVE done... and this is personal experience from the firm I work for...
In my opinion, for one large international firm: one layoff is an economic stumble, two layoffs is an economic reevaluation of your overall budget, and three layoffs is an economic crisis in which you need to reevaluate the entirety of a budget for every single office location (worldwide).
For instance, my firm had it's third layoff late April/early May. Less than two months later... brand new i-phone 3GS for every vice president, principal, and (nearly) every associate. Wow. How about you just come in and slap us in the face. Every associate (mind you, associates do not hold the responsibilities in my firm this might hold in say a mid-sized firm) still has firm paid parking- and in a big city this is $250/month per employee. And then there came the Inter-firm "awards" which hold bonuses upwards of $10k for essentially doing the job you're supposed to be doing anyways.
At the same time, they cut 401k contributions, no bonuses, no raises and there have been three layoffs on a massive scale internationally.
Don't get me wrong, I'm not saying perks should be nixed forever. I AM saying that there are things they SHOULD AND COULD be doing - ie. give out the awards, take a hit on the bonuses, get rid of the free parking for associates, and WTF on the iphones. Don't even get me started on our brand spanking new office space where every desk is equipped with ridiculous light fixtures that were $300 a pop- and do shit for lighting.
I have no doubt there will be another layoff before the end of the year. And I won't hesitate to blame that on management at that point- and know full well more could have been done.
interesting....
some of those items do seem frivolous in light of today's circumstances. But, at the same time it seems on par with the heart burn over wall street bonuses. cutting those expenses would probably be more of a symbolic gesture than anything else.
If you averaged the lowest paid intern to the highest paid associate, each head costs the firm an average of 5k a month in salary/benefits.
So not buying 100 (20k worth) iphones equates to about 4 people keeping their jobs for one more month. The parking sounds like a good cut, but then again they have to do something. A monthly bus pass is probably 100 per month. So the cost is reduced to 150 per month/1800 per year per head vs. of 250/3000. for 100 people that is a net savings of 120k or 2 employee salaries for the year.
So out of a hundred employees we've managed to save 2-3 yearly salaries by doing without. That's 2-3% of the work force. Emotion aside, it doesn't really seem significant in light of the 50% layoffs we've seen at large organizations.
I wonder if no new iphone, crappy lighting, and no parking would do more to hurt moral than letting a few people go... I guess this is the gamble they are playing with.
cadcroupier - Why do they need to provide parking or transportation passes at all? From my reading this is only provided to the top brass or tip top brass and not the lowly interns and project managers, whose transportation expenses make up a larger component of their salary. Are you suggesting that it is fine to make the intern or project manager pay for parking or take the bus, but it is wholly unreasonable to make the principal or studio manager who makes 10x as much do the same thing?
Also, of the things mentioned, only the lighting seems to affect the office drones (for whom good morale is essential in keeping output high). The iphone and parking only affect upper management, who frankly should be able to pay for their own phone service or make do with a slightly older phone and pay their own transportation to and from work. I think a more distributed workload and less output pressure is better on the staff as a whole for morale than making sure that management has their pampered perks.
just random scattershooting here in regards to the informative posts by +1 and cadcroupier and not directed to them or really anyone in general....
- iPhones: Could you do biz w/o one? Concerning my ex-firm, I didn't have a problem with managing principals having the gadgets. Now some members of management had these toys, though I hope they weren't being paid for at the associate level (lowest rung). But who knows.
- Parking: Working near downtown, i.e. "Uptown" is just like being downtown. "Free" parking is hard to find - especially when dealing with the construction guys for the several nearby mid to high rise projects. Try getting to work by 6AM to get a street spot. Not fun when you may have been up until 12AM working on a project. Also for my former firm, the multi-level garage was right there - to not use it would have been a waste of space and off-site parking was greatly reduced the last year and half due to a large mixed-use project that sits on a former mega-lot.
- Bonuses: First of January it was announced no bonuses. In light of the loss of good employees in the second round of layoffs, that was accepted. But what happens at the end of the year when there is a profit? Though I'm not there any longer, I hope the remaining employees get something extra (and not just a holiday ham or turkey)....You know there will be a profit - might as well give it to those that were working double time after all the staff reductions.
- Continuing Ed/ Training: Ok, this is something that is still a complete mystery to me. Revit training. I knew several people that went through the week long course only to be let go in the next round of layoffs. Or the MBA/PM training seminar I was in for a week, paid for by the firm - in fact I was instructed to attend along w/ 30 other associate level and higher employees. Some of us were let go. If you think you're going to layoff certain people based on salary and workload, wouldn't you NOT put them through training?
- LEED: Big push to get LEED certification prior to the revised standards in April (?). Some had to have been let go - this was an investment on the firm's part. But that investment walked out the door.
All the little things begin to add up. Yes, cutting salaries is the easy way to get out of the red, quickly. But what about all the "extras" - that walked out the door? I was never asked to take a pay cut, though in hindsight would have taken it w/o blinking. Others in similar positions felt the same way. If we could not layoff but reduce our wages, so be it. Like a big family, we wanted to look out for one another. We didn't like our co-workers being let go because they are part of the team, you trust them, you know they know what's going on.
cad...imho, the moral is waning at a lot of firms because of the loss of co-workers. Losing a perk or gadget, may be a bummer today, but if it insures less staff reductions, I believe most would take it.
I'm not defending the firm by an stretch or saying these "perks" are necessary things.
My point was solely that these "perks" mentioned above really don't amount to much in the grand scheme of things. By cutting everything mentioned they can retain 3-4% of the work force. Maybe less if you take into account the tax benefits of these sorts of write offs.
Will switching to Ikea task lights and foregoing the Aeron chairs save a head or two? maybe. Are people more productive and willing to work late if they have a paid parking spot? maybe. If the firm only has to cut say 20 vs. 25 will the increased office morale offset the loss of these perks? I don't know.
Its intangible. These things are hard to measure other than anecdotally. I guess firms have to sort out the balancing act between salary/bonus/perk/morale. Some are probably more successful than others at this.
But to think that by foregoing iphones, upgraded lighting, and things of that nature are going to save a firm from 3 rounds of layoffs is sort of not seeing the forest for the trees.
dudes the world is upside down at the moment....take the oppurtunity to be in the right place at the right time. Those who know have an understanding of the latest architectural software will prevail....be it in the drawing room....be it in the board room. Those who are willing to take a risk will destroy the old guard! Rise up young ones....rise up as it is your time.
cad....
I understand, not trying to disagree with you. I thought my former firm's "means & methods" were unique but after reading your post, this is not the case; we have some common experience. Yes, intangible but still a reality. As for 3-4% of staff - in my experience this could be 43 to 58 employees - that's a lot. Any way what's happened has happened; there's no magic time machine to hop in a go back to the good times. It's tempered me and made me tougher, I'm more skeptical.
snook......
amen!
I won't begin to estimate what # of jobs would be saved if they seriously reevaluated the budget at every location. Whether minimal or not, it almost becomes irrelevant. Even if they did all of those measures and could save just ONE job... it's about the psychological effect those measures would have meant. If I knew the executives had done everything they could- it would mean they thoroughly evaluated every aspect of operating costs and cuts- whether you're on the bottom rung or the top step... you would know everything that could be done had been done to save as many jobs as possible.
Don't you think that those of us who are left are watching every single move management makes very closely? Do you not think we are preparing for what we will do- or where we will go next when the economy turns around? We are not dumb, the economy will rebound again and it will fall again. And when it rebounds don't think that just because you saved the iphones and paid for my LEED exam that I'm going to stick with you. Because you got rid of staff I needed the most at a time when we needed to make sure the project was completed in the best way possible- all because you didn't want to give up parking priviledges.
P.S.- it's not 100 iphones, as was suggested above. More like 1,450. Even at a discounted rate, you're looking at $200k+ Oh and don't forget the plan costs every month. Even with a corporate discount, you have to remember these people are traveling internationally and incurring international plan charges. Multiply that by 1,450 people every month.
A few more numbers...
10 interfirm awards at $10,000 prize each= $100,000
Parking for 150 employees at office #1 @ $250/month= $37,500
Multiply parking by 8 office locations in the US= $300,000
Iphones= $200,000 (this is a very modest number)
Lighting= $75,000 (most don't even get used, since there's less people to use them)
New office in a LEED platinum building... any guesses?? I would say in the neighborhood of multi-millions
Without calculating a number for the office space I'm getting $700k+
If you're a realist and that's a modest number, you're probably closer to $1mil, especially when you add in the iphone plans.
So a million dollars is chump change. I guess we're all chumps.
Yeah, in my previous life, I noticed a lot of money being squandered and that firm contracted by over 60%.
For example, there was a christmas party that was an estimated 100k!
why don't we eliminate computers while we're at it ... hardware and software are really expensive and there'd be lots more work to go around if we went back to manual drafting ...
come on people ... there are costs associated with doing business efficiently. but, if you don't have any work for people to do, you can't (and shouldn't) pay their salaries.
let's start getting real here.
File, we wouldn't want to exaggerate now would we? All people like +i, blackgflag, and myself are saying is that we notice a lot of things companies can save money on.
Another thing I noticed that my former office had four company cars -- there were only 50-some people there! They were hybrids and it was very rare when people used them.
file - why don't eliminate the jobs in the usa, ship them to mexico, india, etc. where labor is DIRT CHEAP??? That way the heads can have their sweet gadgets, toys and perks - and 'git er done' by the end of the day! WHOOOOO-YEAH!
Yeah, I know there's a price of doing business. Amongst my fellow associates we were willing to take a pay cut if it meant reduced reductions in staff.
What I was pointing out at my recent employer was how they'd spend money on employees to be trained in Revit or PM/MBA caliber courses and then lay them off a week or few months later. How the hell is that "doing business"? I call it the left hand not knowing what the right hand is doing and vice versa. THAT'S FREAKING INEFFECIENT!
med. - you brought up holiday parties, i think ours was six digits. It's not just the "party". It was also company workshops and bringing in staff from other offices (US and international). Last Fall, there had been rumblings after the first layoff, that maybe we should forgo or constrict the parties to just an office by office basis. The ceo said, "no" we shall do what we've always done. The company "pep rally" the day before is no small event - it's a production and done well. I think you can find part of it on youtube. I wish I had more to drink at the party....
Company cars - i once worked at a firm that gave principals an allowance for autos. These were usually deemed to be "company cars" that each team in the firm could use for business purposes. When the blood of the firm (son of the founder) retired, this slowly changed. Team principals started using the allowance to buy autos that they used, not that could be used by their employees. Sucks to have a project in East Texas that your PM will not sign off on your mileage because you had to use your own vehicle, but the team principal won't let you use the "team car". We were down to one company car that was fought over by 5 teams. But that was another firm from my past - not to be confused with my tenure with the recent establishment.
I don't envy management right now that has to make the tough decisions between cutting pay/benefits/perks or widespread layoffs. From my "in the trenches" view I can name very productive people that got the axe and some not so productive people that are still working. In that sense I'd rather the firm make other cuts to save staff. Then again, what good is it to pay people to sit around and surf YouTube all day?
In a sharp downturn cutting everything to the bone is only a stop gap. If things don't improve you still have to layoff people before the firm is in the red and risks shutting the doors for good. I personally have seen several cuts - pay, perks, bonuses, 401k match, etc. I've also been told how many jobs each cut saved. Right now we are so thin I just worry the firm is too optimistic of a quick turn around.
Yes, I think management (principals especially) haven't taken enough cuts personally to adequately enhance morale and "share the pain." Porportionality is key here and any intern knows that his 15% cut is more than the pricipal's 20% cut. At one local engineering firm top management took a 50% pay cut to show "solidarity" with their staff in this time. That's impressive.
Talking amongst friends it does seem like there is an attitude within top management at arch firms that production/design staff should just be "happy to have a job" right now regardless of whatever cuts are imposed upon them. Not surprisingly, this thread is filled with that angst coming out. I'm not counting up how much the bosses Blackberry costs, but would agree there is always room to build that solidarity between staff and management.
The principals at a friend's firm took paycuts to keep from reducing staff. This helped morale - but the bottom line is you must have projects to work on. They didn't and now they've had to layoff.
Some will argue about the perks and extras - these are overhead expenses in my opinion. Yes, cutting these may save some jobs but the bottom line is getting new or repeat business. This is something that's just not happening at a frequency to maintain the employment like we once knew.
It's not an all or nothing response. It's very simple. When you have had three rounds of layoffs within your company, perhaps it's best to stop expenditures that are not improving the bottom line. Evaluate the budget on an office by office location. The cuts are not forever- just like stopping raises, promotions, or 401k contributions are not forever. But come on, it's not an all or nothing. If you keep it all you WILL end up with nothing.
+i, has business picked up over there at all? Last you mentioned, things were pretty slow.
blackflag - i met up with my contact from hks.
as much as it sucked, he said hks was very professional with him, gave him a decent severance, helped him with unemployment and insurance questions, offered references and projects on disc at his request, and to stay in touch with HR with regards to any questions.
apparently this is like his 7th layoff, he's been in the industry over 20 years - his other layoffs from smaller firms, he said they threw him out like the garbage. this did not happen at hks, they did not "escort him out" like other large firms.
i asked him why he's still in it, he just said "...it's is what i do". not sure what that means, but he looked very relaxed.
xaia: i hope he finds something soon. i had the similar experience with my "exit". as much as i may criticize them; i was treated as humanly as possible. severance was generous considering what some of my friends from other firms received. the hr staff was flexible and friendly, to say the least. you can tell they really don't like doing this - neither do the managers, but the hr people are around when you pack up, not hovering/monitoring. just around if you need a box or cart to move stuff. it's uncomfortable for all involved, even the security guard at the front desk looked unhappy about the situation.
Just to put this into a broader perspective, earlier this year our firm's principals took ZERO pay for 9 weeks while we struggled to get our heads around the economics of the practice and how many people we could afford to retain - none of our staff gave up a penny during that period of time. Since then, our principals have not repaid ourselves the amounts we weren't paid, plus we've taken 35% paycuts against our normal salaries.
my point is this - and I'm reinforcing cadcroupier's thoughts above - most of the items you guys are bitching about really don't make a material difference with respect to the number of people who can be retained or must be let go. sure, those expenses may be visible and politically objectionable, but they don't make a real difference.
we are in a personal service business and payroll (and payroll related costs) makes up the vast majority of our cost structure. sure, you can cut out a $200 iPhone to be "PC" but it's not going to save a single job and it might make the person responsible for business development just that more inefficient.
follow the "real" money and you'll understand why firms can't keep people employed when there's no revenues to support their continued presence in the firm. this is not about being "nice" or "mean" -- it's about survival
it's not personal...it's business
file hit the nail that I was trying to hit on the head....
so who is out of work in this thread?
proudly unemployed 7/08 - current
proudly funemployed 11/07-current
starvingly unemployed 4/09 - current
ditto for me, Anti
med - i can speak for my studio... things picked up between june/july. then slowly the three projects we *thought* we had all disappeared one by one. the rest of the firm is slow as well.
i'm pretty sure the ball will drop soon.
Sucks +i, last I heard things were solid over there in June and July -- I was hoping that would last a long time.
Believe it or not, we went though our first round in late July. We lost 5 people (we are about 300) but they were mostly draftspeople who didn't have architectural backgrounds and they had been billing to overhead for a long time. It would seem there is a very lengthy process in laying people off here -- I heard it was about 4-month decision-making process.
currently employed -- but I was there most recently in 2007 and 2008 so I know how it feels...
tidal, did you just get a job recently?
med- a year ago. :-)
med. - that's pretty good that your firm's first round was in july and it was only five individuals. you may have said before, but i don't recall, what project types are your firm's bread/butter?
blackflag, our bread and butter is federal, public, state, military, and university.
But once in a great while we'll do office.
unemployed since 5/09 - current
unemployed since 2/09 - current
(though I'm working on getting my own firm off the ground, so hopefully I'll be self-employed)
funemployed since 02/09
For all your deck building and design, you know where to reach me.
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