Via GigaOM, Cisco, the company that likely made most of the routers that delivered this page to you, announced numerous cost cutting measures including a four day year end shutdown. Despite Cisco's ubiquity in the networking market, the recession is hitting them, as everyone, hard.
We will be target reductions in travel and discretionary-related expenses, including offsites, outside services, equipment, events, trade shows, marketing and other activities. As part of this effort, we will also implement a year-end shutdown of the US-Canada theater from December 29, 2008, through January 2, 2009 (note that January 1 is already a holiday). There will be some exceptions for targeted business-critical teams including technical assistance services and channel partner and customer product ordering services.
This brings to light a simple, effective strategy for cost cutting: work less. Despite the promise that increased automation could reduce overall labour, the eight hour work day has changed little since it's origins in Britain around the Industrial Revolution. France's 35 hour work week is well known.
While some make bold claims that a 4 hour week is possible, a 32 hour/4 day week seems to be a manageable alternative. The benefits are straightforward: happier and healthier workers, less time and energy spent commuting, less energy spent in keeping offices lit and heated, and reduced unemployment. Against conventional wisdom, there is evidence to suggest that it increases productivity.
In the recent Vancouver election, the Work Less Party ran on a platform of a 32 hour work week and garnered fair support for a young, fringe party. Earlier this month the United Taconite steel plant in Minnesota, in agreement with the union, implemented a 32 hour week instead of layoffs. Web 2.0 company 37signals (Basecamp, Ruby on Rails) runs a 4 day work week. Founder Jason Fried argues that it's not about laziness, less is more:
The point of the 4-day work week is about doing less work. It’s not about 4 10-hour days for the magical 40-hour work week. It’s about 4 normalish 8-hour days for the new and improved 32-hour work week. The numbers are just used to illustrate a point. Results, not hours, are what matter, but working longer hours doesn’t translate to better results. The law of diminishing returns kicks in quick when you’re overworked.
Besides, very few people work even 8 hours a day. You’re lucky if you get a few good hours in between all the meetings, interruptions, web surfing, office politics, and personal business that permeates typical work day.
Fewer official working hours help squeeze the fat out of the typical work week. Once everyone has less time to get their stuff done, they respect that time even more. People become stingy with their time and that’s a good thing. They don’t waste it on things that just don’t matter. When you have fewer hours you usually spend them more wisely.
So if your management says that layoffs are necessary, maybe you could suggest that instead everyone work... less?
Big news earlier this week when Canwest Global Communications Corp announced initiatives to reduce their annualized operating costs by approximately $61 Million. The move translated into 560 layoffs - about five per cent of the company's workforce through voluntary buyouts, attrition and reductions. Canwest management pointed to the current economic environment as well as the structural challenges in the conventional television model as the reasons why.
Interestingly, CEO Leonard Asper stresses in the announcement that Canwest is still eager to transform into a multi-platform media company and build its audience using digital media.
"Having completed an assessment of our Canadian operations and, after careful consideration, we are implementing a number of initiatives that will provide savings that will allow us to better compete in the current economic environment, without compromising our core products and services,” said Leonard Asper, President and CEO, Canwest. “It will not impact our strategy to invest in growth media like digital online, mobile and specialty channels.”
I'm not sure why Asper felt the need to assure shareholders and employees that the operating cost reduction wouldn't impact their digital media strategy... until yesterday.
Word on Vancouver streets is that NowPublic is about to be acquired by Canwest. While a NowPublic acquisition may not seem like a significant transaction, keep in mind that Canwest's current market capitalization is a paltry $80 Million - down from $700 Million only one year ago. NowPublic raised $10 Million in venture capital in July of 2007.
This rumour may have legs. NowPublic Co-founder Len Brody has advised Canwest in the past.
Canwest is Canada's leading international media company. Representing a portfolio of world-class brands, the Company creates and distributes some... [more]
NowPublic is a participatory news network which mobilizes an army of reporters to cover the events that define our world. In twelve short months,... [more]
Electronics retailer Circuit City and its Canadian counterpart The Source by Circuit City are filing for Chapter 11 bankruptcy protection. The retailer, headquartered in Richmond, VA, announced the voluntary petition on November 10, calling it a 
"reorganization" in a release to investors. The company hopes to continue operations unabated, but spokesman Job Babb said it is "safe to assume" that there will be some agressively discounted prices on products being liquidated. Circuit City announced last week that they are closing 155 stores across the US, so today's announcement does not necesarily come as a surprise. The company also recently cut 700 corporate positions - coupled with the store closures, it amounts to a 20 per cent reduction in work force.
In October, AT&T and Circuit City announced a partnership to bring AT&T's U-Verse TV to consumers. U-Verse delivers home tv over AT&T's IP network via FTTP or FTTN technology and is hoping to become a major cable competitor. It is unclear how Circuit City's announcement will affect that retail deal.
