I just lost my job - a cautionary tale.

[Cessna Invesco Palin]

I work (or I did until Friday) for a small R&D team in the United Kingdom, for a company in the musical instrument sector. We make a wide variety of products - everything from speakers to mixers to turntables to digital audio gear. It's a very diverse product line. This was a company that had been growing rapidly for two or three years, and by any measure we had been quite successful.

No more.

Yesterday approximately 30% of our staff was laid off. During the discussion of the layoffs the following facts came to light:

- In the past week, two of our major retailers went bankrupt. (I suspect that one of them was Circuit City.)

- Our two largest retailers in the United States have stopped buying product - not just from us, but from *everyone.* They are literally buying nothing at all.

- Of our remaining retailers, we refuse to sell anything to anybody who cannot get credit insurance. Many otherwise healthy retailers cannot get credit insurance.

In my back-of-envelope calculations, this means something like around a 60 - 70% drop in our sales in the past week.

This is all very disturbing. By all rights this is a company that should be doing very well. We make products that offer good value for money, are very well run by management, look after our customers, and generally try very hard to do a good job. All of this happened very suddenly. Just two weeks ago we were planning an ambitious new line of products, and now the company is fighting for its life.

I really thought my job was relatively safe, even with the current economic situation. Now I'm not so sure how anybody's job could be considered safe. If this company can suffer such a drastic twist of fate in the space of a week, then any company making products for the retail sector could potentially be in danger. It's a frightening thought.

[eridani]

1. Hang in there

:grouphug:

I suspect that we will all be in for some rough sledding.

[Cessna Invesco Palin]

6. Oh, I'll be fine.

The biggest hurdle for me will be finding another company in the UK to spring for a work permit. But I've got some money socked away, an I've got several standing job offers in the states if I can't find anything here. What worries me very much is that most people *don't* have those luxuries, and as I mentioned, some of our retailers aren't buying any product at all. This is hurting everyone in the sector. It is not a good situation.

[HopeFor2006]

2. I wish you the best of luck

:hug:

[Mojorabbit]

3. I am sorry your job is gone.

I hope you can find something soon. I think the collapse is accelerating. I hope something can be done to put a floor down to slow it down.

[XemaSab]

4. That SUCKS

It's surprising that they would lay people off in the weeks before Christmas.

I hope you find a new job soon. :(

[Cessna Invesco Palin]

8. I don't think they had much of a choice.

Basically revenue has fallen off drastically and our cash flow is shot to hell. I'm not too upset about losing my job. From what they've told us of the company's finances, they didn't have a hell of a lot of a choice. This company hasn't had an across-the-board layoff in its entire existence, until yesterday.

[babylonsister]

5. My step-daughter and my niece got laid off last week. It is

getting bad. One of them had worked at a job for 8+ years.

[Cessna Invesco Palin]

10. Oh man, that's rough.

Eight years! What a terrible thing to happen. Hope your family is doing OK.

[Pale Blue Dot]

12. My best friend got laid off on Tuesday.

In addition, there is a budget crisis in my city which may, in a worse-case scenario, cost me my job.

I am extremely frustrated that America is still in denial about the extent of this crisis and about what the REAL cause of it is.

[babylonsister]

13. My stepson works for a major construction company. He's next,

I'm thinking. He has 3 kids and is disabled from a disease. Voted for McCain. Born-again! :shrug:

[proud2BlibKansan]

36. My son was laid off 2 weeks ago

We also have a friend who helped start a company 20 years ago. He got laid off. The only one left at his company is the boss.

[Triana]

7. Jeeeeeeze!

I'm so sorry. This is VERY frightening. I wish you well and hope you can somehow hang in there and make it. Damn we're in for a ROUGH ride.

:(

[Cessna Invesco Palin]

15. It's not looking good, is it?

I'm starting to wonder how long the retailers can hold out. They're so dependent on the availability of credit and consumer spending. Circuit City was never the most financially stable, but according to the stuff I heard today, there are a hell of a lot of midsize retailers trading in the red. Not good. Not good at all.

[CoffeeCat]

62. I am wondering...

...if there is an onslaught of companies that are hanging on throughout the holiday season--hoping
for a Christmas miracle to rain loads of money onto their balance sheets.

If you owned a business that was teetering, it would make sense to keep it together through the holidays--which
is when people are out spending money.

If people don't spend a lot of money this holiday season, I would expect an avalanche of devastating financial
news--especially with retailers that sell clothes, appliances, electronics, home-improvement and home decor. I
imagine that restaurants will suffer, as well as grocery stores.

January, February and March are typically very depressed for most retail businesses. I grew up in a family
that owned businesses in malls. Jan/Feb/Mar business was down 75 percent (from Nov/Dec). That was
the normal business cycle. People are shopped out.

If people do spend this holiday season, they will most likely go into financial hibernation. I think
things could get really ugly in Jan and Feb--as many companies fold from less-than-stellar holiday
sales and incredibly low sales in Q1 of next year.

Again, early next year could be a big tipping point for many companies.

[Cessna Invesco Palin]

70. There is a small problem with what you describe.

The following applies to consumer electronics companies more than my company, because consumer electronics is a more seasonal business, and Christmas is critical for them:

Most of these companies were busy programming their manufacturers to deliver stock for Christmas back in July. Sales forecasts were made for Christmas way back then, and manufacturers were asked to produce product to meet the sales forecasts. You can't just flip a switch and turn this process off. You've got a lot of people sitting on a lot of stock because the sales forecasts were wrong. Stock sitting in a warehouse loses money every day it sits there. Even if you're pretty sure you'll be able to sell some of it at Christmas, you've already paid for the whole thing, and every day it sits in a warehouse, unsold, its value decreases simply because warehousing it costs money.

Companies that depend on Christmas sales to survive plan for those sales. It's not as if Christmas is an unexpected free money love-fest for these guys. They plan for it, it's critical to them, and if Christmas sales don't materialize they are left sitting on a bunch of stock that hasn't sold. So in that sense there's nothing particularly special about Christmas in pure business terms.

[Joe the Liberal]

9. Ouch....

I wish you the best and I hope you find another job soon.

[Pale Blue Dot]

11. No one's job is safe.

I hope you find something soon. :hug:

[Cessna Invesco Palin]

16. I have options.

I think I'm in a better position than most because the thing I do is pretty specialized, and I don't cost lot of money. And I don't have a mortgage. :-) I'm much more worried about other people than I am about myself.

[progressoid]

14. This is some scary shit.

Hang in there Yibbehobba.

[Veritas_et_Aequitas]

17. Hang in there, man.

Sorry about your job. I'll keep you and everyone else mentioned here in my thoughts. Thing have to get better eventually. Right?

[specimenfred1984]

18. Sorry to hear that. I just bought some speakers from these guys in the U.S.

http://www.mcmelectronics.com/content/en-US/about

I have no idea how they're doing but the speakers are well built, service was perfect and I'd buy from them again.

[SoCalDem]

19. That's globalization..we all sink together too, BUT

as bleak as things look for you, you do have an edge over us.. Your health issues are still covered, and I think you have a better redundancy benefit that's not as limiting as ours is.
If your company had been here, and you had coverage, it would stop completely, and you would have to pay 100% of your medical care, and not everyone even qualifies for unemployment benefits..


That said, I hope you find a new job that you like...soon..

[leftofthedial]

20. no worker is safe.

the capitalists have sucked the world dry.

your job, my job, potentially *every* job has been converted into a third or tenth home or a tenth or fifteenth automobile or a pecious metals reserve, or real estate holdings for some rich asshole.

[crispini]

21. Ugh! How frightening.

I am currently out of work, and quite frankly am starting to get scared at my prospects.

[GuvWurld]

22. credit insurance

I don't think many people know what this is. Can you please explain?

[Lochloosa]

25. Primer

Credit Insurance or Trade Credit Insurance (also known as Business Credit Insurance) is an insurance policy and risk management product that covers the payment risk resulting from the delivery of goods or services. Credit insurance usually covers a portfolio of buyers and pays an agreed percentage of an invoice or receivable that remains unpaid as a result of protracted default, insolvency or bankruptcy. Trade Credit Insurance is purchased by business entities to insure their accounts receivable from loss due to the insolvency of the debtors. This product is not available to private individuals.

[GuvWurld]

64. yes...

I understand it is a very niche "product." Unfortunately it also seems those who offer it write more business (do better) during tough times.

[tom_paine]

23. We have had our disagreements, yibbehobba, but I am sorry to hear this and I hope

you find another job and get back on your feet fast.

:hug: :hi:

Never knew you were a Brit. I forgive you for that whole nasty "Revolutionary War Business".

:evilgrin:

[Cessna Invesco Palin]

42. Thanks for your concern, concern troll.

:evilgrin:

I like arguing with you because you're smart, and because you support your arguments well. (But you're still totally wrong. About everything.)

Many thanks for the kind words of support. They are much appreciated. And I'm not a Brit. I'm an American working in the UK. And I give the bastards shit for losing the Revolutionary War every chance I get!

:hug:

Again, many thanks. And keep up the good work!

[MadrasT]

51. My dear yibbehobba

I like arguing with you because you're smart, and because you support your arguments well. (But you're still totally wrong. About everything.)

I'm glad to see you've kept your sense of humor through this difficult time. :toast:

Sorry to hear the bad news. Hang in there... :pals:

[KitSileya]

24. I'm sorry about your job.

I think anyone working for companies that makes products for sale that are not essential, or work for companies that sell non-essential items will feel the crunch the hardest. Of course people working in the health care sector and the education sector will feel the crunch as well, but not as badly as those selling what is basically luxury items - items the average Joe can live without if he must. People just don't have money to buy other stuff, and that trickle up effect will be felt everywhere. If the average consumer only has money for food, gas, electricity, that's what she'll buy, and she won't eat out, she won't buy trinkets, she won't go to clubs, she won't buy clothes. So retailers struggle, their parent industries struggle, and the chole house of cards fall down.

[Tansy_Gold]

27. Nail meet hammer, as they say.

We've been running our economy on non-essentials for a long time -- all the cheap plastic crap from China, "name brand" tee-shirts that cost five times what a regular one will, outrageous expensive sneakers and shoes and sunglasses and other shit.

And all of it made somewhere else by people who are being paid slave wages (literally) so some fat rat bastard can live like a king.

Truth is, we NEED a redistribution of wealth. We NEED a global economy that is more fair, where people are paid for the work they do and not for the greed they can actualize.

I don't know what it's going to take for that to happen. I hope it happens peacefully. But I'm not holding my breath.



Tansy Gold

[CoffeeCat]

63. I just read a NYTimes article about...

...grocery-store products that are selling well--and other products that are seeing decreased sales.

Spam is way up. So are frozen pot pies, beans and rice, and Velveeta.

Paper towels, socks, shoe polish and perfume were a few things that were down.

Even at the grocery store--people are buying things that they really need and cutting out
non-essentials.

I'm a crazy bargain hunter, and when I shop the grocery store aisles, I look for the sale tags in
the refrigerated/frozen sections. Since these products have a shorter shelf life than most dry
goods--I find great buys. Usually it's expensive foods that are drastically marked down. I found
1 lb pkgs of real, fresh mozzarella cheese marked down from $8.99 to $1. I nearly fainted. I
purchased 20--and gave some to my neighbors.

Here's the link to the "New York Times" article. It's about the massive spike in Spam sales.
Apparently the company can't keep up with demand.

http://www.nytimes.com/2008/11/15/business/15spam.html?pagewanted=2

[enid602]

26. rebound

I think there´s a possibility that the dearth of orders you´ve recently experienced stemmed from the lack of credit and liquidity in the financial sector at the end of the first quarter. I´ve read that liquidity has been (by and large) restored in the financial sector, and that after a few months, sales will hopefully rebound.

[Cessna Invesco Palin]

35. I expect it will, yes.

The problem right now seems to be that nobody knows when this is going to happen. Therefore sales forecasts are meaningless. When sales forecasts are meaningless, it's difficult to make decisions (on the order of six months out) about what to build, where, how much to build, and when.

[enid602]

41. previous levels

And remember, too that previous growth levels were achieved by credit swaps, hedge funds and all sorts of risky and unscrupulous credit tools that will hopefully not be used in the future. We won´t get back previous growth levels, but I hope we avert a full-scale depression.

[Cessna Invesco Palin]

43. We're somewhat immune from that malarkey...

...though our retailers certainly aren't. The vast majority of our customers are professionals - career DJs and musicians - or hobbyists with money to spare. The place where it hits us so badly is the place where it hits everyone else who sells into retail right now - and that's namely that retail is effectively uncreditworthy. We haven't had any problems with our credit - yet. But we've become very conservative in terms of who we extend credit to.

[CoffeeCat]

65. It's hard to believe that credit-default swaps...

...were even legal.

It boggles the mind.

How in the world is it possible that thousands of people purchased a million-dollar insurance policy on the
same batch of financial instruments? It's like crazy gambling on crack.

How in the world did anyone think this was sustainable, at ANY level?

The initial mortgages made to uncreditworthy homeowners weren't sustainable.

The bundle of good/bad mortgages sold as mortgage-backed securities--to Wall Street--weren't sustainable.

And the credit default swaps on these tainted cess-pool securities--are...<no words!>

Didn't the financial geniuses at AIG--one of the the companies who 'insured' these mortgaged-backed
securities--own calculators? I don't get it.

[Cessna Invesco Palin]

68. What I find intensely frustrating...

...is that my company basically didn't do anything wrong. *We* have no problem getting credit, even now. But retailers are currently getting fucked at both ends, because nobody's buying anything and nobody wants to lend to them. Naturally, this eventually percolates up to the manufacturers.

[Tigress DEM]

28. Another scary thought, heard on the radio, "Today's sales is the lowest since the day before 9/11"

Now I'm not saying they timed the 9/11 thing to take the spotlight off sales figures, but they sure used 9/11 to tell us to go shopping.

[pdxmom]

29. It's hitting companies small and large, but the big corporations are

being very quiet about it. I work in a family law office and I'm stunned at the number of people that we have dealt with over the past month who talk about cut backs and lay offs in their companies. Some of the biggest employers in this area are quietly cutting jobs...not wholesale layoffs yet, but small cuts in departments thta aren't making the news. They are starting to hit close to home here, with rumblings at my husband's job now, which is a huge corporation. Scary stuff.

[Cessna Invesco Palin]

39. The big companies aren't being that quiet.

CC going into bankruptcy was a move to save the business, not a capitulation, and they did NOT go quietly. GM is screaming to the rooftops that it's going to go under in order to get government money to smooth out their cash flow. Retailers are advertising the hell out of their reduced forecasts. The name of the game at this point is to set expectations low - very low - and then exceed them.

What we experienced at our company was an across-the-board cut. Every department was required to let people go, and some departments were eliminated completely. The biggest worry for me about the structure of this layoff is that it primarily impacted people who deal with sold products - support staff, tech support, etc. These are people whose jobs have been safe forever, because they were necessary for the company to function as an entity that sold products to people and supported them. The guy who runs our company is pretty shrewd. He wouldn't cut that staff back so much unless there really wasn't a need for them. What this tells me is that our sales are completely fucked. There is literally 10% of our prior support staff on hand now.

[neverforget]

58. For the last 3 months, I have actually done about 3 weeks worth of work

because we have no work coming in. I'm very surprised that there haven't been layoffs yet. One of the good things about working for a big company is that the part of the company that is doing well is carrying us at the moment. I certainly don't expect that to last much longer though unless work comes in. January is when I think the hammer will fall.

[malaise]

30. The truth about trickle down economics

is that the trickle down only occurs when the racket crashes.

[ThomWV]

31. If 60~70% of your sales were to 1 or 2 customers then your job was never safe in the 1st place

Diversity ....

With sales that high to one or two customers it was not correct to say you worked for the small audio products company. You really worked for the one or two distributors, and when they went out of business and laid off the people that were, in effect, working for them, well, you were one of them.

[Cessna Invesco Palin]

32. Well here's how it is...

In the US, selling musical equipment means the following:

1) Guitar Center

2) Sam Goody

3) About a quintillion e-commerce outfits, independent shops, etc.

Guitar Center is the Wal-Mart of music equipment. There is no company in the MI/DJ space that doesn't get at least 25-50% of its sales from them. As goes Guitar Center, so goes the industry as a whole.

However, that's just the US. ROW is very different, but even there where we are more diversified, sales have plummeted.

[DU GrovelBot]

33. ## PLEASE DONATE TO DEMOCRATIC UNDERGROUND! ##

==================
GROVELBOT.EXE v4.1
==================



This week is our fourth quarter 2008 fund drive. Democratic Underground is
a completely independent website. We depend on donations from our members
to cover our costs. Please take a moment to donate! Thank you!

[Cessna Invesco Palin]

34. Most inappropriate grovelbot post evah. n/t

[bigtree]

37. I'm a nervous wreck right now

I'm in retail.

[Cessna Invesco Palin]

40. What sector? n/t

[bigtree]

44. grocery

My wife tells me that people have to eat, and I keep reminding her that there is absolutely no obligation for the stores to provide that food.

I've had my hours cut in half over the past year, but I'm thankful I still have work. And, it's union, so the wage is okay. But, you can see the inventory going down and holes on the counter where it used to be a strict no-no to run out of items. 24 years in this job (basically unskilled labor) and I'm wondering where I'll find the same wage. Silly to complain, but I really can't see this company surviving without layoffs. They say you have to watch for the signs of your business failing and be prepared. I'm as nervous as I can be.

Best of luck in your search, btw.

[supernova]

38. Job loss became decoupled from perfomance ages ago

This is what a lot of people refuse to understand.

It used to be that you lost your job for for performance. Not anymore. Losing your job now very seldom has anything to do with performance. Now, you're just another widget they can save money on by not having you.

edit: I do feel for you. I really do. I've been laid off for the past month. I have decided to set up my own business.

[blue cat]

45. I'm so sorry

Take care.

[Blue_Tires]

46. i had a state job at a university, and that got cut as well

the state has a huge budget shortfall...

[Kazak]

47. I'm in auto parts...

It's pretty f'n scary what we're seeing right now. :scared:

[Cessna Invesco Palin]

55. What is your role?

Are you working for a company producing auto parts or selling them?

[barbtries]

48. sorry you lost your job

and your point is well taken. hopefully things turn around sooner rather than later.

[Grateful for Hope]

49. Our jobs haven't been safe for a long time

As someone who lost a long-time position in 2006 (and, who was not employed for 18 mos despite full-time searching in the NY metro area), I saw first-hand the result of unfettered free-trade and deregulation.

Now, the rest of the world is seeing what I saw back then.

This comes as no surprise.

[LeftishBrit]

50. Sorry to hear this...

hope things pick up for you!

[Cessna Invesco Palin]

69. Thanks!

You don't happen to know anyone in the UK who needs a software quality assurance engineer or manager, do you? :evilgrin:

[sarcasmo]

52. No buying of product equals no making of product,, a scary situation.

[bonito]

53. Learn to market outside of the lock box

Cut out the lazy ass middle men in the process and have direct feedback from users for future product development, free thinkers don't think alike imo.

[Cessna Invesco Palin]

57. Well, that's very... ambiguous advice.

What makes you think that we weren't doing that already.

[bonito]

71. I don't know

Give me a problem to solve...

[sellitman]

54. I lost mine 2 weeks ago.

Companies that have tried to get me to work for them for years have nothing to offer now.

I am (was) in the building industry. (Sales)

I hope both of ours luck improves but I think this down turn is just starting.


:hug:

[Juche]

56. I worry too

I work in a QC lab at a plant where premium nutrition products are made. However in this economic crisis I assume that is one of the things people are going to cut first and just go for the generic nutrional products.

Its my first job after college and I am living with my parents while saving over 70% of my after tax income (the rest goes to gasoline, student loans & misc), I have no kids and no spouse so I should be ok. But all the people who were barely making ends meet before this crisis who have family members who depend on them for healthcare, they really need help.

[littlebit]

59. My girlfriend was laid off

from Amex about a month ago. She had been with them for five years.

[Budgies Revenge]

60. my boss told us yesterday....

that we have ONE day of work lined up for the next two months. Beyond that, nothing. (industrial mechanical work) So, yeah, I guess I'm looking for a job at the moment.:toast:

[CoffeeCat]

61. Best of luck to you...

...and I hope you have success at finding a job that you enjoy--as fast as you need to.

You remind everyone--that no one is immune. It could happen to any of us.

I find it astonishing that this happened so close to the holidays. Doesn't the demand for musical instruments
increase during the holidays?

Your employment experience is most likely a microcosm of what's happening throughout this country. Things
were slowing down--but it feels like things are now grinding to a halt.

I try to stay positive. More importantly, I try to stay prepared. I have this feeling that what you
experienced is what many companies are experiencing. We just don't hear about it. However, pretty soon--
the economic consequences are going to come crashing down.

I think the tipping point is very, very near.

Again, best of luck to you--and I hope you are doing well. Thank you for sharing your story. Stories like like
are more insightful and helpful than a week's worth of CNN stories on the economy.

[blogslut]

66. ...

[Cessna Invesco Palin]

67. Aww, it's cute!

Thanks a million. Wombats always brighten my day. :-P

[democraticco12]

72. It would suck to lose my job at this point

With all these credit card bills and the loan plus the rent...ugh.