Don’t Think HCM Matters?

Now this story is not only about HCM – but I can’t help but think that Sr. Management’s complete disconnect from their workforce and customers is really costing them.

News from Circuit City –

The company expects a loss from continuing operations before income taxes of $80 million to $90 million for the first quarter.In early April, Circuit City forecast a pretax loss of $40 million to $50 million for the first half with a strong recovery in the second half. But yesterday, it withdrew that outlook, citing “uncertainties in the current operating environment.”

Of course this follows on the heels of this brilliant announcement:

CC Plans to Layoff 3,400 Overpaid Workers

Which I interpreted as a sign to sell CC Short

Employees are our most valuable asset . . .

Which turned out to be pretty good advice – see chart below:

CC Performance – April 2007

CC Performance April ‘07

And I don’t think this one is ever near done dropping.

Circuit City Expects Loss – New York Times

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3 Responses to Don’t Think HCM Matters?

  1. John says:

    Makes one wonder whether the C-suite will ever catch on. Of course, on the other side of the coin, HR professionals are not helping matters much by their seeming inability to talk the langauage spoken in the C-Suite.

  2. David Creelman says:

    Human capital issues are a blind spot of people brought up in the finance function. In fact, they’ve been trained to explicilty ignore and be dismissive of ‘soft’ issues. This preesents an opporunity to add value.

    I wonder if the Finance people presented the graph above, saying “If we lay of x number of people we will save y dollars…and by the way the share price will absolutly tank.”

  3. tomob says:

    It is interesting that the stock didn’t tank until they had to revise their earnings forecast late in March. Says to me that not only does management not understand these issues – but neither does the market.

    I smell an opportunity.

    Tom O’B

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