150 to be let go this week. Morale low. GSK is trying to cut its way to more profits. The bean counters do not take into account the lack of productivity of employees worrying about their job safety.
How are the other sites. With a young CEO, I am sure he got to the top by being a nice guy!? He will have no trouble sleeping at night as he "right sizes" the company.
Good luck you to you all and there is life outside GSK
Don't know about all the CEDDs, but I do know a person who was somewhat involved in the decision making for her department and she said to me that they made a sincere attempt to follow a process in order to not only make it seem fair, but actually be fair.
In the end she said 90% of the decisions you probably could have predicted without going through the process, but that there were a few whose job situation changed, positive and negative, after the process.
Let's face it, 1) the folks who say cut 50% of the jobs are usually not the ones who decide which 50%. The ones who have to do that take that task quite seriously. and 2)usually it's not 50% of the jobs, but 50% of their personnel budget, so it's easier for those who have to choose which 50% to tell 10 people their jobs are gone vs. 13, so all other things being equal, the higher paying ones are more vulnerable.
C'est la vie.
Well, yes and no. They need the time to cross all the T's and dot all the i's. That is to make the result defensible. But the actual decisions are probably made fairly cold blooded. There likely is a budget that they have for salary, so they need to stay within that budget. In the one CEDD that went from 75 to 25, almost all the people let go were the more experienced (i.e. long term) employees. Surprise!
I would be surprised if the actual decisions as to who would go took more than a week. They have the charade of needing to follow the process to make it look as if it was a difficult decision. In the scientific area, HR would stay out of it, unless it got into a legally tenuous area regarding protected employees. But when there is a general cutback, there is a lot of flexibility, and agencies are loathe to second guess companies. Remember, GSK is strongly anti-Union, and there are no employment contracts except at the highest levels. So GSK is a hire at will, fire at will company.
I actually agree. 3 months, believe it or not, is pretty fast. In that timeframe they have to decide who is staying and who is going and make sure that each of those decisions is defensible in a court of law.
So why don't they do that in the background before announcing layoffs? Well, in a perfect world they would, but word would get out quick once HR asked every department to rank all the employees.
It is well established that an amateur can often do as well in the stock market as a 'professional manager'. And while one may do well in short periods of time, one has to look at the net after tax return over a long period of time, and 30% is not realistic. Yes, some hedge funds had triple digit returns for portions of 2007. Others sort of fell flat towards the end.
Yes the market is not for the skittish, but retirement is also a period where one should not be investing needed money in investments that make one skittish.
If the market makes an average of a 12% per year return over a decade, and one is making more than that, most should be satisfied. 12% is the historical return post war, WWII. In fact, post war it has ranged from -3% to +27%.
One can diminish the strategy of long term, but one cannot dismiss the value and power of dollar averaging.
I am still puzzled at your continued reference to ML funds, as if they apply to GSK. They don't.
It is not the bears or the bulls that get burned in the stock market. It is the pigs.
A person should evaluate their strategy as to whether it provides them with enough in retirement, rather than making the absolute most. One can sleep much easier that way.
"You mention trying for a 30% return. Well, that is not likely for anyone outside of a hedge fund. But unless you are a financial heavyweight, the small player is pretty well at the mercy of the 'big boys'. "
My returns have been:
30% 06 (late Feb-->Dec)
24% YTD in 08 (goal was 15% based on the assumption it would be a bear market)
Your idea that the IRA is for some long term goal dictated by a pre-defined structured investment scheme (e.g. X amount in a conservative investment, Y amount in growth, etc) is precisely the reason why you believe only the Hedgies can return big. Do the Hedgies hold back N% for fixed income investments? Nope, a GS invests where they believe they can make money. Or for that matter where they can manipulate money. ;)
Another problem that has been created by the mutual fund industry is the whole concept of "long term". I find it comical to see posts on various forums where an investor proudly proclaims they are a "long term" investor. My translation is: "eyes wide shut". Will GSK stock ever see 60 again? Of course. How many years will it take? Who knows. Chances are it will be a single digit percent return per year in getting there. Even if the "long term" investor either buys the GSK stock directly, or finds a fund where it's embedded and the fund itself gives a 27% return over 3 years or 9% per year, that's still pitiful. Yet the chances are the fund manager returning 9% will think it's a wonderful return and will tell you so. If nothing else they'll probably get a million dollar bonus out of your money.
If one is skittish about home growing your own mutual fund in your IRA then by all means go with an established mutual fund. This market is not for the skittish. But even there look at what the top holdings are in the fund. Are they last year's winners? Bad sign. Are most of the top stock holdings up or down? Are they stocks you would want to invest directly in? If you don't research the fund, then that again is as bad as "guessing" on individual stocks.
As a final tidbit, investing in ETFs is sort of an in betweener type of strategy. More dynamic returns but still a Fund like structure. Maybe some of these fall close to your Vanguard funds- don't know I have no context for comparison. Loading fees?
Over all I'll stick with the idea that those leaving should roll away from the ML captive environment. It has worked out extremely well for me.
Perhaps that is your problem; adjusting as the winds blow. the 401k is for the long term, and one should have a long horizon. I guess I am puzzled by your reference to M-L funds, as there are 15 Vanguard Funds offered (Yes, some of them are life cycle funds, so targeted towards specific retirement horizons)but there are six Index funds, and I didn't see the M-L name attached to any of them. Several Lehman Bros.
I don't have any specific financial training either, but I have done well. Yes, some years it has been in the hole, but with dollar cost averaging, over the years it has been a nice tax deferred shelter that will serve me well. Trying to outguess the market is a good way to come out poorer.
You mention trying for a 30% return. Well, that is not likely for anyone outside of a hedge fund. But unless you are a financial heavyweight, the small player is pretty well at the mercy of the 'big boys'.
Before one throws stones at the GSK 401k, one has to look at how one did with their own IRA, either regular or Roth, to see if they did any better. The GSK 401k offers more opportunities than many companies offer.
I have been out of GSK from some time now, and the last layoffs cut down most of the people I still knew there. I have a lot of in depth knowledge of the drug industry, and time will tell if my assumptions come to fruition. But it really doesn't matter either.
There is no doubt a responsibility exists on the individual to adjust weights in the portfolio. Question: How many times per year did you adjust your portfolio? Note there is a limit on the number of times per concealed loading fees the company paid. Most employees like those every where probably addressed it once a year.
You are assuming that Merryl Lynch funds themselves are well managed. If we had access we might be able to go over a couple of the current offerings. Outside of energy of course. ;) What was your largest percentage yearly gain in your IRA? Probably mine was around 12% when with the company. Most of the time it was piss poor, and in speaking with my then co-workers they weren't too pleased with their returns. Why wouldn't a company want to address an issue being felt by many?
It may not cost those leaving anything in fees for keeping their IRA in place, but there is a huge cost in leaving the account in a system where only ML funds (or GSK stock) are offered. There is absolutely no way you can dedicate 25% of your funds for a stock whose PPS you believe will increase dramatically in the coming year. Every bit of my IRA is in stocks. No funds. Not recommended for the weak hearted or those not willing to put in the work. But the potential pay back can be enormous. Try figuring out how to get 30% gains on the year with the ML fund offerings. For those employees leaving who are uncomfortable in dealing with stocks, there are superior funds offered by others (e.g. Fidelity).
Leaving one's IRA in situ is the same as saying you are happy with the returns. Would I have been up +25% YTD if I had just left the IRA behind in a ML fund driven environment, in this whacko market? Hard to imagine.
BTW mountain - I have no formal financial or investing training. Although I now trade in stocks for a living- my 3rd career? It's called on the job training. LOL Best thing that ever happened to me was to be out sourced. Must admit the insurance stinks. So for the wounded getting the boot... there is life post GSK after the golden handcuffs are removed! Have courage and go forward. ;)
I am a bit puzzled, since the GSK 401k contains a rather broad range of investment options, and if you selected poor ones, that is on you.
And, there are no expenses incurred by the employee by staying with the GSK 401k. (Each employee has there own circumstances to consider, and each may be different as to options.)
The real hidden benefit is that they will be able to roll their company IRAs away from that Merrill Lynch disaster of bogus funds. There were years when if not for the company matching funds, the IRA would have been losing money. I've done more with mine since Feb 06, than if it had sat under GSK/ML auspices till the year 2020+. No exaggeration. There is an option for those leaving to keep the IRA as is... don't do it! Roll it!!!
I often wondered if the execs used the same Merrill Lynch selection of funds? Or maybe had the company pay for a better financial investment service for their IRAs? Surely what is good enuff for the worker bees is good enuff for them? :O