Vanguard has about 10,000 employees. It has always claimed to treat the members of its "crew" as family. Recently, the CEO Jack Brennan boasted that he could improve the company bottom line significantly. There are two ways to do that: lower expenses or increase assets under management. With the state of the stock market the last few years, Jack had no option but to cut expenses. What bigger expense is there than long service employees?
Each department had to do a forced ranking (a la Jack Welch at GE). The bottom echelon were all fired with little if any warning and told that they were non-performers. Departments with 100% great staff were told that they HAD to pick at least 15% who were non-performers, even if they all had exemplary performance records. Managers who refused to do this were fired.
Jack Brennan and certain members of HR know the true reason for all of this: Vanguard does not want the negative publicity of having layoffs. They're still pretending to be the good guy even though they have systematically fired 5% of their employees in the past 6 months. Sounds like a layoff, huh?
Many of the employees fired have many years of service and therefore have higher salaries and benefits. Employees are targeted to get rid of the most expensive ones first. Performance ahs NOTHING to do with this.
Do you want to invest with a company that lies to its employees and then fires them for no reason other than to help the pompus egotistical CEO keep his promise / bet? I think not!
0 comments