(have co-owned a business where we made folks whole for pay the owner skipped out on during the failure, asset acquisition, and their onboarding with us; plan ahead and you can do the right thing, fail to plan and people will experience pain; you're not saving the business while burning through the severance allocation, you're just lying to yourself that the business isn't already dead)
Given Convoy's margins and operational leverage, I'm not sure it was this simple. Legacy freight brokers who have been doing this a long time are being caught surprised. They may have thought they had months of runway that rapidly collapsed to weeks.
We need stronger unemployment benefits. Barring a public solution, severance ensconced in employment contracts is next best. Convoy had nine figures of debt. Depending on the covenants, it may not have been able to hadn't over cash at windows to employees in the form of a novel severance package.
There's at least one major US freight forwarder who has been in business for over 40 years and who has never done a layoff, not in 2008, not in COVID, and not now. They're not perfect and have other flaws (like every other company everywhere), but still.
So it's a (common) choice. They are balancing the +/- against other uses of the last bits of cash. To some degree they do it because the employee pool accepts and expects it, no better reason. If the representational damage was more acute, they might choose someone else to disappoint.
The more common problem is a "hail mary" play, where the management team is perhaps fooling themselves about the probability of success.
I think the ethical thing to do there is discuss it with employees, but that's just me.
https://www.google.com/amp/s/www.businessinsider.com/fedex-s...
If you look only at people who won the lottery, you'd have to be an idiot not to spend all your money on lottery tickets. How many times has someone done this and lost all their money, screwed over thousands of people, and never been heard of again? We don't know, because they aren't famous, but my suspicion is it's a much more common outcome.
What if they did and lost it all 6 weeks ago? What would that signal instead?
FedEx was already shafting their pilots for months before this. Bounced paychecks, pilots paying for jet fuel on personal credit cards, and more.
If I was a pilot there, I'd have said "Fuck you, Fred", even though he won. How sociopathic do you have to be to gamble company money (sorry, isn't that a felony?) while bouncing paychecks?
And yet you'll still have people here applauding your hustler mentality, apparently.
That's an extremely short horizon. Normally it's more than a quarter out, at least.
