[dschobel]

I know a few companies which have cut benefits to their employees while at the same time acquiring other companies and it makes perfect sense.

1) It's a buyers market because a lot of companies are looking for an out even at reduced valuation. 2) Employees are similarly not going anywhere in a climate like this so you can cut benefits for the time being because everyone is cutting benefits.

Look at the acquisitions as a long term investment whereas the reduced benefits are a band-aid.

[aaronblohowiak]

"makes perfect sense" -- if you don't mind really high turnover when "good times" return AND low productivity for your captive employees.

[dschobel]

you're assuming that the companies won't reassess when the situation recovers. that's why I specifically said 'band-aid' as in a temporary measure.

and when the benefit reductions are in lieu of lay-offs, morale shouldn't be affected. people should be far-sighted enough to realize that everyone has to scale back.

if the companies don't readjust later then it goes without saying (or so I thought...) that they will lose employees.

the bottom line is that there is good sense in it.

[aaronblohowiak]

"when the benefit reductions are in lieu of lay-offs, morale shouldn't be affected" -- in isolation, i agree. I think good will is easily lost and hard to re-earn, and spending a ton of cache while asking people to cut back is pretty harsh in my book.

"if the companies don't readjust later" .. i don't think people forget so soon. Also, the most effective people still have options in the downturn and are the ones you really can't afford to lose.

Mergers are really hard to get right, and you need buy-in from on high all the way down through the effected organization.

The bottom line is that you need to account for the ill will internally when you are considering making a decision like this. It may very well be the optimal choice for increasing short-term shareholder value, which is a publicly traded company's number 1 priority.

Now, if Adobe also announced that they'd pay doubletime for vacation for employees that took the unpaid time off and stuck it out, that'd be a Good Thing.