To the 400 D&B Employees Getting the Axe: 'You'll Be Thankful' Posted on Jan 10th, 2007 with stocks: DNB
George Gutowski submits: Dun & Bradstreet Corp. (DNB) issued a jargon conflicted press release announcing its 2007 guidance. For a company with roots in financial and credit reporting, the smoke screen is curious. The press release leads off with a bullet point �Outlines Plans to Create $80 million to $85 million of Financial Flexibility in 2007.� Just what is financial flexibility and why is it headlining the press release?
After explaining that �D&B does not provide guidance on a GAAP basis because D&B is unable to predict, with reasonable certainty�� (almost everything it seems), the press release attempts to describe the financial flexibility program. Included are initiatives in Organizational Design, Product and Technology Complexity and Sales Force Effectiveness.
There is a confusing promise that starts out creating $80 million to $85 million of financial flexibility. But it is modified with caveats about restructuring costs, taxes, transition costs and something called non-core charges. Then the real sauce bubbles to the surface and we find out that the re-engineering process will eliminate 400 jobs. But it�s all in the guidance, they say. In the future they will be able to say �as previously announced� and act as if the issue has been thoroughly discussed.
If its time to restructure say so. If job losses are about to occur, say so. If you want to issue guidance, say so. This financial flexibility terminology indicates management confusion. Senior executives and the board probably did not understand the consultant�s presentation. Everyone was most likely too embarrassed to ask for clarification and now they are all stumbling forward. To the 400 about to lose their jobs: right now it sucks but sooner than later you will be thankful.