Well then aren't you the perfect capitalist. You don't care about workers or your investors.
I would hate having you for a boss when the company falls.
I'd never let a company fall!
They pumped their staff dry to build up their service and infrastructure, then sold the whole thing off to another company ( just a new venture by the same execs) for pennies on the dollar so they could run the place with a smaller staff now that all the hard work of building the damn thing had been done.
If that was the actual plan, I would say that not only was that unethical, but likely illegal (that would violate a ton of fiduciary responsibilities for one thing, and outright fraud if they sold it significantly below book value). I doubt that was the plan, but sometimes it does work out that way.
Normally firing everyone would be a big expense in the short term as you have to pay out for a lot of things, but if the company is dead and bankrupt, you can skip out on some of that.
What do you have to pay out for? Assuming that it is an at-will position, the only thing they owe you are wages on work you have done, unless you have a contract that stipulates more.
Of course, OnLive isn't dead and isn't bankrupt. It's being sold/renamed and the execs are turning out their pockets and saying "Whoops! We're bankrupt! Teehee!".
I seriously doubt they are saying Teehee. They put a lot of their own money into that firm that is now gone. Yes some of them had more money to put into the firm as a 'new' investor, but they didn't get something for nothing.
Then again there is the other side. There is no win-win in a situation like this. I wouldn't even say there's a win-lose, its all lose-lose. Sure the execs may get nice spots in the new company, but is that surprising to anyone?
They run the damn company.
Most of the time in a bankruptcy a lot of the execs lose their jobs, if for no other reason as it takes a special skillset to navigate a firm through and out of bankruptcy. And again, unless they had more money to put into the firm or had some type of senior debt that gets converted to equity, they won't have any equity, at least initially, in the new company.
We also learn this every day in capitalism, employees = liabilities. When you go ask a bank for a loan, they don't want to hear that you have X employees, they want to hear you have none and need none.
You make it far too simple. Employees aren't necessarily liabilities. In fact any that is should be fired immediately. Employees are either specialized assets or commodities. You want job security? Don't be a commodity.
The programmer that understands the intricacies of the Onlive system at a level no one else does is an asset. The programmer who maybe is great at Java (or whatever language they program in there) and works his butt off is a commodity. One is easily replaceable, the other is not.
And banks (as well as investors) DO want to know about your employees. When I was in grad school, I did work for a local VC, vetting pitches before the actual analysts started really looking at it. There were two things I was told to look for: Management and Key Employees and idea uniqueness. And the first was more important than the latter. The head of the firm once told me "Give me a mediocre idea with a stellar management team and I'll make millions for our clients. Give me the worlds best idea and an average management team and we're all going to be asking 'Would you like fries with that?'"
It's true that neither banks nor investors want to hear about the number of employees you have (unless it is too high), but that's for a very good reason: The purpose of companies is not to create jobs but to allocate capital efficiently and maximize return to its investors.
This is a GOOD thing. One of the WORST things you can do in an economy is have an inefficient allocation of capital and labor. Overall GDP is maximized when all of the economic assets are used in the most efficient manner. If I can run a company as good or better with 100 people instead of 150, then I am freeing up those 50 people for a better economic use of their labor.
Now obviously, just firing people with no economic growth elsewhere is a problem as it leads to unemployment and a drag on economic growth, but that's not, and should not be, the primary concern of the company. That's far more at the level of national fiscal policy.
If they have to seize your company, they can't seize the employees or sell them (plus, they get sick, they take vacations, they ask for raises, they unionize, etc.), hence employees = liabilities. Capitalism as we know has as one of its primary goals the elimination of jobs.
That's pretty pessimistic and really just outright wrong. The more people that don't have jobs, the less people there are that can buy your products. The goal of capitalism is the most efficient use of capital and labor to maximize economic output.
