‘You Cut My Paycheck, Watch What Happens’ : Company Misses Yearly $925 Million Target, Corporate Furloughs Employees to Cut Expenses, Leading To Malicious Compliance

Author image for Eleonora Bader
Eleonora Bader
May 17, 2023 10:00 AM EDT

Companies are out here making millions in profits (but not enough millions) and still manage to screech like a toddler who is upset about the color of a lollipop. So, what to do when you're sitting up on your high horse in corporate, and your company is going to miss their annual target of nearly one billion dollars by exactly $75 mil? Who is gonna pay for your third beach house in the Maldives? Action must be taken to prevent the lack of said beach house!

One man shared his experience via Reddit, explaining that a few years ago, while the market was down, he was working for a very large (Fortune 100) company that was still making a lot of money because the industry they specialized in was generally profitable. After foreseeing this 'large gap' in revenue, corporate took it upon themselves to cut everyone's paycheck. They didn't take into account human nature, because this industry had a lot of very educated, talented, and dedicated scientists and engineers. 

What I mean to say is, these people loved their jobs and worked a lot of overtime — just because. When their paychecks were cut, they adopted the natural attitude of 'If you don't care about me, I don't care about you'. The company ended up in shambles. If you're making a lot of money as a company and foresee a small snag, for heaven's sake don't get greedy… your employees should be your priority, not your imaginary beach house. Scroll down for a detailed account of what happened. For more malicious compliance at its finest, click here. This man got his company back after they refused to reimburse him for travel costs to work.

Advertisement
  • 01
    Font - Posted by u/MrIncredible222 14 hours ago Furlough? Okay, if you want... M OC I worked for a very large (Fortune 100) company a few years ago. Our division was in a particular industry that was linked to oil and gas, so when oil prices declined our revenues declined, there was no demand for our products because there was no investment in the market segment. There was literally nothing we could do; if no one was building oil refineries, no one was buying our tech, no matter how good or bad
    via u/MrIncredible222
  • 02
    Font - About 7-8 years ago, the market was way down. We were very lean, and our industry very profitable, so we still made excellent margins but sales were down so our profits were down. I think we had a target of about $925M in profit for our division, and we were on track to maybe make $850M. Still wildly profitable. However, the corporate office was pi ed about the missing $75M, go find a way to "bridge the gap."
    via u/MrIncredible222
  • 03
    Font - One of the things they did to make up some of the lost profit was to cut everyone's paycheck by 10%, and then tell us to work 10% fewer hours (36hr workweek instead of 40). This sucked, but they instituted it in late spring and we did summer hours every summer where you'd work 9hr days Mon-Thurs
    via u/MrIncredible222
  • 04
    Font - and then half a day on Friday, so what it really meant was you worked 9hrs Mon-Thurs, and took your "furlough Friday." So the pay cut stung a little, but you essentially got a three day weekend every week which made it a little better.
    via u/MrIncredible222
  • 05
    Font - What they didn't consider though was human nature. We were in a highly specialized industry, with a ton of very educated, talented, dedicated scientists and engineers (and I was a dweeb finance person). Most of these people lived in the office. No one worked a 40-hr work week. 50 hours
    via u/MrIncredible222
  • 06
    Font - was the norm, and plenty of people worked more. People didn't care because they were devoted to work that was interesting, and we were generally pretty fairly paid.
    via u/MrIncredible222
  • 07
    Font - However, cut their paychecks and everyone says "screw you, you only get my 36 hours now." I was in a meeting the first month after the policy took place, and the CEO and CFO were in disbelief that our billable hours had fallen by more than 30%, not 10% as expected. Yes, we got paid by the hour worked because we charged for engineering time, not just for products. So I had the distinct pleasure
    via u/MrIncredible222
  • 08
    Font - of explaining to the executives that yes, you only cut people's pay and hours by 10%, but guess what, everyone quit working unpaid overtime and only worked 36 hours to the minute. And any time something happened on a Friday, sorry, there's no one here to help.
    via u/MrIncredible222
  • 09
    Font - But it gets worse. All summer, most people were pretty content to enjoy the shortened schedule. But come September, summer hours end and everyone is back in the office 5 days a week and leaving after lunch on Friday. Plus, for the older people, the company had a generous pension plan that paid out something like 80% pay after you hit retirement age. So a lot of
    via u/MrIncredible222
  • 10
    Font - these people decided retiring for 80% was better than working for 90% and retired. Tons of others left. The company lost literally centuries of highly specialized knowledge and experience, walking out the door, and because it was specialized it was very very hard to replace. Originally the program was supposed to save the company $17M; they lost way way more than that in lost productivity,
    via u/MrIncredible222
  • 11
    Font - lower billings, higher rework, and just lost opportunity. I don't know how it turned out, I left when everyone else did after the summer. But my friends still there tell me the company still hasn't recovered. Tl;Dr, company tries to save money cutting pay, people stop working unpaid over time and just walk out the door costing the company millions more.
    via u/MrIncredible222
  • 12
    Font - zorggalacticus +2 - 10 hr. ago Why is the first cost cutting measure always aimed at the employees. Sorry, we gotta cancel the Christmas dinner this year. Profits are down. Ope, gotta cancel our productivity incentive bonus. Sales are down and we "just can't afford it". Sorry, you can't have a cost of living raise. We didn't hit our imaginary sales target as a company. Still made several million dollars in profits, just not enough millions.
    via u/zorggalacticus
  • 13
    Font - The people who make these decisions wipe their a with fresh hundred dollar bills, but as soon as they run low on "toilet paper" it's time to crack that whip. Happy, well compensated employees are more productive employees, but that costs money so that's totally not something we can do. Vote Reply Share
    via u/zorggalacticus
  • 14
    Font - ProfessionalDaikon16 +1 · 9 hr. ago Which really gets interesting because they claim they get paid so much because they take the most risk making decisions which the board may not like or may not be profitable enough and will lose their jobs...only to turn around and maintain profit margins by doing as you describe here, salary cuts, benefit cuts, expense cuts, etc Vote Reply Share
    via u/ProfessionalDaikon16
  • 15
    Font - Luminous Grue +2 10 hr. ago . I wonder if the bigwig executives took that 10% haircut too. Vote I mean, I don't wonder much, I'm pretty sure I know the answer. Reply Share
    via u/LuminousGrue
  • 16
    Font - Ladydi-bds+1 - 14 hr. ago Wonder of the company learned a lesson. Part of me doubts it though. Vote Reply Share Sieve-Boy 11 hr. ago The idea is doubtless the idea of some MBA type and you can guarantee they learnt NOTHING from this. Vote Reply Share
    via u/Ladydi-bds, u/Sieve-Boy
  • 17
    Product - 1560-2 BRAM lordatomosk +1 - 10 hr. ago Companies don't want to make money, they want to make ALL of the money they can possibly make. And this is what happens when they don't think past that Reply Share Vote Ignorad - 11 hr. ago It'd be great to have business studies of this type of occurrence. Vote Reply Share
    via u/lordatomosk, u/Ignorad
  • 18
    Font - Naagyo +1.9 hr. ago Wait how did they notice a 30% decrease jn billable hours but people were working unpaid overtime? Am i missing the meaning of "billable"? Vote Reply Share MrIncredible222 OP . 9 hr. ago We charged out people's time. Everyone was salaried. The more hours worked, the more hours we could charge to customers for the same salary expense. Vote Reply Share
    via u/Naagy0, u/MrIncredible222

Want More? Follow Us and Add Us as a Preferred Source on Google.

Tags

management millions-of-dollars corporate cutting-costs employees-revenge malicious compliance revenue petty revenge oil-and-gas absence Horrible Bosses furlough paycheck retirement funny profits
Scroll Down For The Next Article