I'm asking for the assistance and indulgence of the hive-mind of the blogosphere here. I'm trying to figure out whether this is a new idea with potential or an old, flawed one with obvious difficulties that I probably should have recognized before wasting our time with this post.
So anyway, I'm posting this story last night for the paper, and idly wondering how the 53,000 layoffs announced by Citigroup — 15 percent of its workforce — compares in size to the 10-percent across-the-board layoffs planned by the nation's largest newspaper chain.* And in thinking about all these layoffs,** I started thinking about and wishing that there was something that could be done to save at least some of those thousands of jobs at Citi (and, yes, at Grommett).
The thousands of soon-to-be-idled Citigroup workers don't seem to have much recourse. Uncalloused professionals don't have a union to speak on their behalf (at least I've never heard of anything like the Tellers and Junior Loan Officers Local 115). But I'm guessing they do (did?) all have a 401(k) plan. And while I don't know anything about the particulars of Citigroup's 401(k)s, it's likely that it was structured, as many are, to provide employees with investments in company stock.
It's possible, in other words, that the tens of thousands of soon to be former Citigroup employees are the owners of tens or even hundreds of thousands of shares of Citigroup stock. Collectively, these workers may own a considerable share of the company that has just decided to show them the door.
How considerable a share? It's certainly nothing like a controlling interest, but it's not impossible that the cumulative stake held by all 53,000 of these workers, added to the number of shares held by their soon-to-be former co-workers who aren't among those getting laid off, might constitute some measurable fraction of the total company — something like 2-5 percent.
And 5 percent, or even 2 percent, is large enough to be heard. Shareholders have rights. When it comes to management decisions, they have more rights than employees do. They get to vote on corporate decisions and they get to introduce measures to be voted on. And while 2 percent might not sound huge, it's more than enough to wreak holy havoc until your voice is heard and your concerns are addressed.
Current and former employees of a corporation like Citigroup could form a shareholder's union. They could commit to vote their proxies against managment on everything from approving the next slate of directors to approving the reading of the minutes. They could introduce shareholder resolutions on everything from executive compensation to divestiture from the Sudan. Not to mention potential shareholder resolutions setting limits and parameters and obstacles of every kind for mass-layoffs — although I'm not sure, technically, what sorts of specific measures might be introduced on that subject. By enlisting the support of institutional investors — the giant pension funds like TIAA-CREF and the smaller ones that would be their likely allies, such as the NYC police and firefighters and the religious groups in ICCR — their 2-percent voice could easily become a 10- or 15-percent voice.
All of that would be more than enough to get Citigroup employees a seat at the table. It might even be enough to get the idea of reflexive mass-layoffs off the table.
Such a shareholder's union would, like a more conventional labor union, require quite a bit of organization. And, like a labor union, it might expose employees to the possibility of technically illegal but commonplace retaliation from management. But set aside the question of whether or not such a thing would be easy — what I'm trying to figure out is whether or not such a thing would be possible.
What I'm really looking for here is help filling in these blanks: "Slacktivist, you idiot, you simply don't understand ___________." "Nice try, Fred, but you're overlooking the glaringly obvious and insurmountable problem of ______________."
Any thoughts?
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* These were announced in October, but won't be implemented until early December. I'm probably safer than most, since I'm regarded more as equipment than as personnel, but none of us really knows. All we know for sure is that 1 out of 10 of us is about to be looking for work in an already saturated newspaper job market. Spending six or eight weeks in that kind of limbo tends to make one extremely frugal.
I keep hearing economists fretting that "consumers" need to get out there and spend to get the economy going, but the consumers I work with really aren't inclined to buy much of anything just now. This, by the way, is why bolstering unemployment insurance as part of any economic stimulus plan isn't just a bleeding-heart liberal tangent. That insurance is necessary for the unemployed and their families — who will turn around and spend it on necessities, so it's effective stimulus in that sense. It's also necessary to help reassure the much larger number of workers who are still employed but worried that they won't be for long. The more insecure such workers feel, the less they're going to spend. These days, that worry extends beyond Citigroup and Grommett. If the government sent out another round of stimulus checks today, 90 percent of that money would go right into our piggy banks and mattresses.
** Layoffs on any scale, but particularly the massive sort that Citigroup is talking about, are an admission of catastrophic failure by management. If CEO Vikram Pandit really believes these 53,000 layoffs are necessary, then it seems like he must also admit that the number is really 53,001 — with the last one being himself. He has failed at his job.
If you're the manufacturer of, say, rotary-phone components or rabbit-ear TV antennas, and if this is still the only thing your company is able to do, then you're going to have to lay off workers because the world has changed and your company has failed to change with it. But what do such layoffs mean for a firm that is not like the proverbial buggy-whip factory?
Citigroup went through the considerable expense of recruiting, hiring and training 53,000 workers. It provided these people with equipment and office space to do necessary, productive and profitable work. And for years it has paid them — some of them handsomely — to do that same necessary, productive and profitable work. Now Citigroup is saying it doesn't need those 53,000 workers anymore, that it will be better off without them. Either the bank has been behaving foolishly for years by tossing away its money on the extravagance of 53,000 unnecessary workers, or else, if that work has been necessary, it is now deciding to do something foolish by ensuring that this necessary work will no longer get done. Either way, Citigroup and Pandit don't look smart.
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