Staff Redundancies

[PeteA]

The problem is that Merlin are on the stock market now. They have shareholders interests to think of. They need to make sure that the company is attractive to prospective buyers and current shareholders. Big companies and not just Merlin are cutting costs to save money to please there investors.

What these companies don't realise is that you can only cut so deep before you lose your customers. I have seen it many times before, outside of Merlin. Someone has an idea to save money by having a restructure. It's done and customer satisfaction goes down, so profits fall. So what do they do, cut a little deeper, customers don't renew, profits fall, cut some more etc etc. Vicious circle.

Remember that Merlin are making a lot of money and will still do this at the end of the financial year. They, as a company, are not in a negative situation where more money is going out than coming in. They are in a positive position and will make money, just not enough to keep investors happy.

This is my opinion on why these cuts are happening. I might be wrong, but I may be right

 

[Slugjc]

Merlin as a whole maybe in a positive situation, but they will treat each park differently. They wont keep a park on if it is bleeding money even if the other parks are doing well. share holders will look at the finances and wonder why they are supporting a failing park, which will in turn take money away from the others to prop up said park which would have a knock on effect. as giving money to alton towers will effect Thorpe Park, Thorpe park will want to know why there budgets being cut to support Alton. Its ok saying these jobs can be saved etc etc. But we don't know. We as a group don't know why they have decided too make those 190 cuts. We don't who and what positions these people are. will it affect anything we don't know. all we know is the park has not done as well for a certain reason and that somebody has looked at the balance sheet and tried to get the money back that the park has not made. The jobs may or may not be relevant to the parks performance. we simply don't know. We all know that its not right on a moral ground as these people will have rent, mortgages and bills to pay. But a millionaire in his castle doesn't care about a worker in his terraced house. and the millionaires have the power at the end of the day. Always have and always will. Money and shares talk. Alton Towers will survive and start to grow again.

 

[Enter Valhalla]

"It's not their fault but oh well, tough luck" is cold. And yes, businesses do owe people a living, otherwise people would have no money to spend on businesses to keep them going, that's how economics works. I would utilise those staff better to recuperate the loss, but I'm not a capitalist ghoul who only cares about the short term bottom line. The comparison doesn't really work, because the loss of income and customer satisfaction wasn't caused by market forces, it was caused by incompetence, incompetence by the people who will be swinging the axe. That may be how business works but that doesn't mean we should be ok with that.

Merlin management have two ways they can go about it. Either they take a hard look at themselves and fix what's gone wrong, or they take the easy option and take it out on staff. Staff have always been something Alton Towers has done well, cutting them isn't going to help their falling reputation, it'll make it worse. It may reduce their overheads but it won't help their income, and it'll just get worse as word of mouth spreads about the lack of staff and their decrease in performance. Too many staff isn't a problem and redundancies won't help the park at all, it's nothing but a cash grab that they've finally got an excuse to make.

What utter rubbish! No company is going to keep employing staff which it no longer needs and, as I've already said, if trading conditions improve next year additional staff positions are likely to be created to cover the additional work which additional guests will create. The service will not suffer at all with fewer staff as the number of guests is significantly lower.

How anyone can think that a business owes people a living is frankly beyond me. When trading conditions are poor tough choices have to be made which can involve staggered openings, SBNO rides, cuts to entertainment or, in this case, cuts to staffing. We've seen all four of these at Towers over the years but I'm sure you'd agree that the first three will have a far more damaging effect on the reputation of the business than cutting staff to bring staffing numbers in line with requirements.

You keep saying that the people at the top need to look at themselves, well I'm sure that they have. Nobody can deny how significantly quieter the park has been this season so obviously dramatic changes have to be made in all aspects of operations. Any business that just carries on going like normal and doesn't react to changes in trading conditions will ultimately fail and go under. Big changes are likely to have happened in the way they do business and this cut in jobs is likely to only be a part of it. Whilst it's unfortunate there's no way that they can have another year like this year without making dramatic changes, no business of any size would do nothing to react to such changes in trading conditions.

 

[e4kenndr]

Is it only me who thinks that if Merlin announce any form of profit this year that they shouldn't be allowed to do this?

Businesses seem to be aiming for ever more unrealistic targets year on year and it's the people at the bottom (Staff and customers) who get shafted if they don't meet them by either lay offs or increasing prices.

Personally if I owned a business, big or small, I could never detriment someone's living if I was still making a profit, I'd simply accept that the profit would be lower that year due to whatever reasoning, as long as the company overall isn't losing money year on year (which I can;t imagine Merlin are anywhere near doing) - even if they are down this year I would have to grit my teeth and bear it knowing that customers will eventually come back when they either forget, or realise how safe the place actually is, but scaring them away with prices that are pure greed for what you get certainly isn't the way to do that.

 

[Enter Valhalla]

Is it only me who thinks that if Merlin announce any form of profit this year that they shouldn't be allowed to do this?

Businesses seem to be aiming for ever more unrealistic targets year on year and it's the people at the bottom (Staff and customers) who get shafted if they don't meet them by either lay offs or increasing prices.

Personally if I owned a business, big or small, I could never detriment someone's living if I was still making a profit, I'd simply accept that the profit would be lower that year due to whatever reasoning, as long as the company overall isn't losing money year on year (which I can;t imagine Merlin are anywhere near doing) - even if they are down this year I would have to grit my teeth and bear it knowing that customers will eventually come back when they either forget, or realise how safe the place actually is, but scaring them away with prices that are pure greed for what you get certainly isn't the way to do that.

I get what you're saying and in an ideal world this would be the case.

However businesses need to stay one step ahead of the game and react to problems when they start to happen rather than waiting till it's too late. Being too late would mean when the business was not turning a profit. If they waited until there were no profits, then the cuts would have to be far more dramatic. It's best not to rest on your laurels and to react early to difficult conditions. It's not nice but it's one of those things.

 

[Rick]

Is it only me who thinks that if Merlin announce any form of profit this year that they shouldn't be allowed to do this?

I hope so, that sounds like the most ill thought out financial policy I've ever heard. And I'm not just saying that as a shareholder.

 

[Martin]

Weird and interesting how people can get furious over Merlin cutting costs by not putting as much theming as they originally planned to cut costs, but when actual people are going to lose jobs to cut costs, even though they're still making millions, it's just "one of those things".

 

[AndrewH]

Weird and interesting how people can get furious over Merlin cutting costs by not putting as much theming as they originally planned to cut costs, but when actual people are going to lose jobs to cut costs, even though they're still making millions, it's just "one of those things".

The point is that the theming is needed to improve guest experience but with how busy the park has been these staff aren't needed. It is really very sad for the people and nobody wants to see it happen but unfortunately it has to.

 

[Martin]

But Merlin, and as far as I know, the park, are still making lot of money. The shareholders need to grow up and accept there'll be less profit this year due to a freak accident, and management should grow up and accept they're the ones making the place worse, and cutting staff won't help the place in the long run.

Maybe it's the state of the world's economy for most of the last decade, but people generally seem far too comfortable with people being made redundant for doing nothing wrong whilst bad managers don't suffer and shareholders continue to milk ever more of the profit. Supporting a group of workers who are losing out shouldn't be seen as the radical position some people seem to think. Hope the 190 affected have a decent union behind them, but from my own experience that's unlikely.

 

[Dar]

So, because the park was quiet this year they're getting rid of staff ready for next year? In the ultimate lack of faith in their own product and their belief that the product isn't good enough for those guests lost this year to return next year.

 

[Rick]

But Merlin, and as far as I know, the park, are still making lot of money. The shareholders need to grow up and accept there'll be less profit this year due to a freak accident, and management should grow up and accept they're the ones making the place worse, and cutting staff won't help the place in the long run.

It's not about "growing up". The shareholders that you talk about about multi-national banks and investment firms. They have a very clear mandate from those who are investing and the company has a very clear mandate to deliver the results. After a very bad year, the company has to be seen to be making tangible improvements to the bottom line.

Going public has very profound consequences which have only been made more clear through this period of difficult trading.

Maybe it's the state of the world's economy for most of the last decade, but people generally seem far too comfortable with people being made redundant for doing nothing wrong whilst bad managers don't suffer and shareholders continue to milk ever more of the profit. Supporting a group of workers who are losing out shouldn't be seen as the radical position some people seem to think. Hope the 190 affected have a decent union behind them, but from my own experience that's unlikely.

I don't think anyone is discounting the human element to redundancy, it is tragic, of course. That said, Merlin can't sit on their hands. The number of people using the product has dwindled, therefore the number of people required to deliver the product has to reduce or your cost base remains static while your revenue evaporates. That isn't sustainable and would ultimately risk the future of the park and the business going forward.

So, because the park was quiet this year they're getting rid of staff ready for next year? In the ultimate lack of faith in their own product and their belief that the product isn't good enough for those guests lost this year to return next year.

That's too simplistic a view and (I hope) you know it. The path back to prosperity (or indeed equal revenue) will be long. The hit to the park post-incident has been far and away the largest the industry has seen. It's a huge unknown in terms of how long the business will take to recover, but by reducing the number of salaried staff, you can provide a flexible staffing model that can grow as required in 2016.

If each of those staff are earning £20,000, that's out of the box savings of £3.8m. That's before ENI, pension, uniform, training, etc etc.

The business world is cut throat, it's sometimes a place where difficult decisions have to be made to ensure survival and to ensure that you remain where you want to be and where you have promised your shareholders you will be. Merlin is now very much a part of that world and like it or not, it's going to remain that way.

 

[Slugjc]

Big companies that make a profit are always re-structuring. For example how many of you know that Holiday giant and multi million profit company Thomson/first choice (known internationally as TUI) last year made redundancies and put all staff below assistant manager down to part time. All to save brass. Nothing new its just because of what happened this year Alton would have had to make a bigger deal of it just because of the media scrutiny of the park, its profits and how its run.

 

[James]

Weird and interesting how people can get furious over Merlin cutting costs by not putting as much theming as they originally planned to cut costs, but when actual people are going to lose jobs to cut costs, even though they're still making millions, it's just "one of those things".

That's a bit of a silly comparison. Lack of theming on rides is usually due to the budgets being needed elsewhere/projects going over budget. Like The Smiler's groundworks (theming cut to fund the problems with groundworks), Air's technology (theming cut to fund the bigger than anticipated cost of the technology) etc...

These job cuts are due to Alton Towers falls in guests, a fall in profits, the park not performing as it should. Entirely different kind of thing. It will be hugely upsetting for those who will go through losing their jobs. You're talking about this like Merlin are the devil's advocate, like a company has never ever done something like this. This happens, this is how businesses operate, this is the cruel hard world we live in. Most people accept it because most people know how much this crash has affected Alton Towers and how the park has suffered.

 

[Enter Valhalla]

But Merlin, and as far as I know, the park, are still making lot of money. The shareholders need to grow up and accept there'll be less profit this year due to a freak accident, and management should grow up and accept they're the ones making the place worse, and cutting staff won't help the place in the long run.

Maybe it's the state of the world's economy for most of the last decade, but people generally seem far too comfortable with people being made redundant for doing nothing wrong whilst bad managers don't suffer and shareholders continue to milk ever more of the profit. Supporting a group of workers who are losing out shouldn't be seen as the radical position some people seem to think. Hope the 190 affected have a decent union behind them, but from my own experience that's unlikely.

I really don't know why you visit these parks then if you're such a fierce anti capitalism, socialist thinker. You think that they're run by an "evil bunch of corporate baddies" yet you still support them.

It's just how business works and saying that people need to "grow up" shows your lack of understanding of how business works. I really fail to see how you can say people need to grow up for wanting to protect their company and keep it sustainable in a time of tougher trading and increased competition. The number of staff needed to cope with the number of guests they had this season is lower than their current staffing levels, they can't take the risk of keeping on that many staff when next year could be another difficult trading year. I really don't see what you don't understand about that.

 

[Martin]

Sorry chief but anyone who says "why do you buy things if you don't love rampant capitalism" isn't worth having a discussion about economics with. Especially when I'm not arguing for socialism. I'm simply arguing that people shouldn't lose out because the company they happen work for messed up through no fault of their own. So I'll repeat that it isn't a radical position to take.

There's a difference between understanding why they're doing it and accepting it. Everyone knows this is how it works, doesn't mean we should be ok with that. If that makes me Karl Marx then so be it.

 

[Slugjc]

Its ok to be ok with it though. Just as much as its ok not to be ok with it. I've seen what mass redundancies can do to an area, the huge loss of profit making coal mines where I live is still being felt 20 years after they closed. But this isn't an entire industry so not relevant just had to say it. You are right @Martin the fact that they are loosing there jobs is wrong, they have bills mortgages and rent to pay bless them they must be worried as to how on earth they are going to find a job in that area of the country, or in a job that they want to do.

However this is business and the people at the top have given the chop. Should they look at themselves, well no. Nobody ever will fire themselves. The company can regrow, but sometimes they have to chop of a few branches just so the tree can grow. Its not right. But a few jobs over everyone job sometimes has to be made.

 

[Enter Valhalla]

Sorry chief but anyone who says "why do you buy things if you don't love rampant capitalism" isn't worth having a discussion about economics with. Especially when I'm not arguing for socialism. I'm simply arguing that people shouldn't lose out because the company they happen work for messed up through no fault of their own. So I'll repeat that it isn't a radical position to take.

There's a difference between understanding why they're doing it and accepting it. Everyone knows this is how it works, doesn't mean we should be ok with that. If that makes me Karl Marx then so be it.

Equally someone who thinks that managers should keep staff that they don't need isn't worth having a discussion about economics with since you seem to keep missing the crucial point, with such low attendance they don't NEED such a high number of staff, you seem to think they should be kept on just out of kindness. Any company which keeps spending on resources which aren't needed and which doesn't quickly respond and react to difficult trading conditions doesn't deserve to be in business, even the public sector which is funded by our taxes makes cuts when required.

I would also point out that you are assuming that this is only staff at the bottom who are suffering. For all you know there could be a total management re-structure which may involve cuts to some quite senior positions.

 

[RoyJess]

Don't forget the 20/80% rule of business = 20% of the staff will be doing 80% of the work. So they probably lay off those 80% first that only do 20% of the work.

If they are looking at redundancies, I presume that most park staff are seasonal and their contracts have already ran out and some won't be renewed, so this really leaves the few that work on the park all year round including hotel staff as well as the park staff.

I think this image sums up the way business works

 

[Tim]

As far as I'm aware all frontline staff below manager level are seasonal. They are not the people being effected by this recent announcement.

 

[AndrewH]

I don't know this but is maintenance not full time (since they actually have work to do all year round). If it does effect maintenance then the park could become a reliability nightmare in a couple of years