The left is complaining about a company that is laying off 8,000 employees while it continues to pay Matthew McConaughey $10 million a year. The article complains that CEOs aren’t making sane financial decisions. This attitude comes from a complete lack of comprehension of how employees add value to a company.

Let’s look at the numbers. Salesforce has about $31 billion a year in annual sales, earning about $200 million in profit. That’s a profit margin of less than one percent. The company employs about 80,000, meaning that 8,000 workers are about ten percent of the workforce, and cost the company somewhere around half a billion a year in salary and other HR costs. McConaughey costs the company $10 million. Since he is a contract employee, there are no real HR costs.

So how much value do those employees bring? That is, McConaughey may cost $10 million, but if him being the spokesman brings $800 million in sales, it’s a good investment. That’s why companies have celebrity spokesmen. It’s why Michael Jordan was the single best shoe salesman in Nike history.

Then consider the 8,000 employees. How much do they bring in? That’s the question that needs to be answered, which is what the CEO does. It’s a value computation, not just a cost computation. Companies are not there to be a jobs program. Companies exist to make a profit for their investors. If there is not enough profit, there are no investors. If there are no investors, there is no operating capital. If there is no operating capital, there is no business. It’s not that difficult.

If you want to make more money, make yourself more valuable as an employee. You do that by showing your employer that you can help them make more in profits. Learn a skill that your employer finds valuable. If all you know how to do is flip a burger, pick boxes before putting them down over there, or pushing an idiot stick (a broom), then you are worth very little and can be replaced by nearly anyone. Or no one.

The real minimum wage is zero.

Categories: economics


Don W Curton · March 16, 2023 at 7:02 am

In almost every company, there’s the 80/20 rule in that 20% of the employees do about 80% of the work. If you do it correctly, most every company can trim 10% of the workforce and still function correctly. Hell, every single merger, buy-out, joint venture, etc. justifies itself on that principle.

That said, there’s this line from the article – “The still-not-Hawaiian Benioff is well-known for lavishing his employees with wild perks, which included hosting wildly expensive celebrity-headlined conferences and opulent wellness retreats.” After seeing tik-toc videos of “tech employees” going into offices with coffee bars, ping pong tables, meditation rooms, etc. I don’t exactly feel sorry for anyone involved. The last “wellness retreat” I went on was an all-day goal setting conference in the back room of a Holiday Inn Express, with some of the worst BBQ I’ve ever had served for lunch. Still employed, however.

Aesop · March 16, 2023 at 7:42 am

Strictly speaking, minimum wage is the minimum wage.
“Unemployed” qualifies one for cash and prizes worth several multiples of minimum wage.
Even panhandling pays better than minimum wage.

Company X laid off 8000 flunkies?
10% of everybody everywhere is dead weight.
Things are tough all over.
Welcome to reality, losers.

Henry · March 16, 2023 at 9:59 am

The challenge for any CEO and his HR department is, of course, knowing which people belong in the 10% category that he can afford to do without. All too often, especially at big corporations, the first to go are the gray hairs who have the institutional memory and experience, precisely the folks that need to be kept. Since they are the best compensated, they make an easy target for clueless HR directives.

Anonymous · March 16, 2023 at 10:59 am

How many sales does Mr.McConaughey close? ZERO. How many sales leads does he generate? If I was a CEO I’d sure like have some numbers to base decisions on.

Personally I’d cut Mathew and a couple of VP’s. It sounds like folks there were try to provide a wonderful work experience instead of a profitable business.

    Divemedic · March 16, 2023 at 12:10 pm

    I’m sure they DO have those numbers. A competent CEO would. The company exists to make a profit, not make a wonderful work experience.

    Jonathan · March 16, 2023 at 5:12 pm

    If I were the board, I’d be looking for a new CEO – 1% is a horrible return for an established company, which at this point they are.
    They aren’t a tech wonder anymore at this point, so they need to show a profit bigger than a rounding error…the CEO is definitely failing his mission of shareholder profit!

    Anonymous · March 16, 2023 at 8:16 pm

    So you’d save $11M/year (for a company with annual revenues in the $20B range)), rather than save $500M/yr, and call that an improvement?

    I’ma guess you don’t do well at Monopoly, either.

    Per the company, they hired too many people during the work-from-home COVID days, and they’re shedding some of that fat now. And this comes on the heels of laying off 2000 just last December.

    As they’re a cloud-computing company, they could probably lay off everyone, and it would only be a bummer in Silicon Valley, while opening the market for any ten smaller companies to pick up their slack.
    As it is, their CEO sits like Zorg, and sends out memos to fire thousands of people whenever it pleases him to do so.
    You want loyalty, buy a dog.
    You want a job, contribute to the bottom line.
    And keep your resume updated anyways.

      Aesop · March 17, 2023 at 3:24 pm

      ^That was me. Sig must’ve gotten lost in the ether.

Beans · March 16, 2023 at 12:00 pm

I used to think that true minimum wage was $0, but now more than ever with the neo-feudalism that the Leftists are pushing, the real minimum wage is debt-peonage followed by chattel slavery. Which we are heading towards.

Pile so much debt upon the shoulders of the workers that all the wages will go to service the debt, not the workers. At some point the powers-that-be will make transferring the debt from family member to family member totally legal and ‘moral’ (in their eyes) and the debt will be transferrable and treated as a commodity by said powers-that-be and that will basically be chattel-slavery in all but name. Debt passed from generation to generation, with no way out.

Think that’s crazy? Look at what’s happening with homes, with large corporations outbidding single families for properties. The logical extension of “You will own nothing and You will be happy” which this represents is that They will own everything. And what They control, they have the power to do with what They will, including passing the debt.

    Aesop · March 16, 2023 at 8:01 pm

    Central and South America has tried that plan for centuries, Beans.
    See if you can spot the fly in that ointment, and doubly so in a populace with more guns than the world’s ten largest armies, combined.

      Toastrider · March 17, 2023 at 7:33 am

      Hence the latest push to ban firearms.

        Aesop · March 17, 2023 at 3:23 pm

        Yes, but.
        Tyrants have been trying gun control on this continent for 250 years.
        It never works out the way they’d intended.

Marxist Materialism · March 16, 2023 at 3:56 pm

To each according to his needs, workers of the world unite.
Forward! Yes we can.
Insert brain dead platitudes of the comrades to infinity.
There was a woymn apparatchik comrade of the CPUSA who said that the only thing being worse than exploited (employed) was not being exploited or unemployed.
MC Matty is a fraud poseur RED that you could spot a mile away.

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