It was the
Headline: They Just Don't Get Rumors!
Cutting Through the CutsWe been through the job cut spin before, but I want to show you a good example from Tuesday, when Avon Products ( AVP) announced more job cuts. Here's the reality with job cuts: They don't often save as much as the companies says they will. It makes sense, right? Think of your favorite failing newspaper or financial institution. Buyout offers are offered to employees but not enough of the great unwashed bite. Who wants to retire at 51 with so much more to contribute to civilization by editing crossword puzzles and television listings and a package that'll keep you off cat food until 54? But when the new offer comes out to keep you off cat food until 55? Whoa, where are the moving boxes? Who can resist, right? Problem is, from the companies' perspective, that extra-sweetened offer cost them more than they expected, which is a term we use loosely, so sure enough, they come out with an announcement that the jobs cuts will cost more and save less than they thought, another term we'll be loosey-goose about. Unfortunately, the business media constantly plays along with unawares, confusing investors in the process. Check out this example about Avon, a classic of the dark art form. Now Avon, the woman's beauty product company, has already said that it would lay people off and, now, that it will cost more than it first expected. But:
"Avon Products Inc. on Tuesday said it will cut 2,400 jobs as part of its multiyear restructuring plan, which will cost more than originally expected and ultimately save the beauty-products maker $430 million annually."After starting with a rumor you can't believe but can't dismiss, perhaps it's a comfort to end on a prediction you simply can't believe.