Former General Electric (GE) chief executive, Jack Welch is blamed for starting mass layoffd. Photo: Pexels
The technology industry is reeling from the loss of hundreds of thousands of jobs.
According to economists, this can simply be chalked up to the Covid-19 pandemic and inflation, but others have looked to the past and pointed at the US’s former General Electric (GE) chief executive, Jack Welch.
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The YouTube video by the More Perfect Union channel and FDSignifire paints Welsh as a CEO who prioritised profit over workers and their needs. But how did Welch come to attain and supposedly yield so much power?
Born John Welch, he was given the nickname Neutron Jack after the famed neutron bomb, which is claimed to kill people yet leave structures standing because to his practise of terminating employees.
The formidable leader started at General Electric in 1960, when he worked as a junior chemical engineer in Massachusetts. He did not enjoy his vocation and almost left.
Reuben Gutoff, a GE executive, encouraged him to stay by promising him that he would assist establish the small-company feel Welch envisioned.
In 1981, Welch replaced Reginald H. Jones as GE's youngest chairman and CEO. Welch had dismantled much of Jones' previous administration by 1982 through aggressive simplicity and consolidation.
He established his now-famous '’’rank and yank’’ method, in which he fired the poorest 10% of his managers each year, regardless of absolute performance.
According to Welch, GE had 411 000 employees at the end of 1980 and was down to 299 000 at the end of 1985. 37 000 people were laid off from firms that GE sold off, while 81 000 were let off from ongoing operations.
At the time, this had never been done in this scale before in business and Welch set a precedent for other companies to follow suit.
These layoffs proved successful as GE gaining enormous value. When he resigned, GE's market value had grown from $12 billion in 1981 to $410 billion.
Author David Gelles writes in The Man Who Broke Capitalism that when people look around and say, ‘’Why is the system like this? Why are things unfair? There's actually a guy who made it happen. There was a guy who set a precedent for the economy today, and that guy was Jack Welch.’’
Gelles harshly criticises the businessman, accusing him of making America poorer, less equitable, and more insecure, and of hollowing out industrial communities while enriching Wall Street.
‘’It has left corporations unaccountable for their failings, while leaving more of the population vulnerable to the whims of highly paid executives. And it has created an economy where once proud industrial companies lose their way, with sometimes fatal consequences,’’ wrote Gelles.
In 2005, Welch authored Winning, a book about management and business. ‘’You can look at the situation and feel victimised. Or you can look at it and be excited about conquering the challenges and opportunities it presents,’’ he wrote.
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