Obama, Steve Jobs, and Hiring in a Tough Economy

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Is Obama more business-friendly than Bush? The economic stimulus plan proposed by President-elect Barack Obama offers more immediate tax cuts than either of the tax cuts signed by President George W. Bush, according to a story in today's Wall Street Journal. Included in Obama's $775 billion plan is $300 billion in tax cuts for individuals and businesses. Obama would allow companies to use loses incurred in 2008 and 2009, to retroactively reduce their tax bills for the past five years. There's also a planned tax credit, worth about $50 billion, for companies that hire new employees or opt to forgo layoffs.

How to recruit in a tough economy, part 1. Fred Wilson blogs on "Putting the Band Back Together," or when former co-founders join together in a new startup. "Everyone in startup land likes to work on a big winner and so many entrepreneurs are willing to give up on their own startup dreams (at least temporarily) and get the band back together for a while," he writes. One problem? Equity. If you're trying to recruit a former co-founder to your current startup, he or she may be disappointed by the lower ownership stakes you can offer. Wilson recommends that entrepreneurs hoping to recruit other entrepreneurs should be more generous with equity than they might be with someone else.

Jobs speaks out on his health problems. A few hours ago, Apple released a statement from Steve Jobs, the iconic founder whose health problems have been the subject of fretting by shareholders and Apple fanatics alike. Jobs writes, "As many of you know, I have been losing weight throughout 2008. The reason has been a mystery to me and my doctors. A few weeks ago, I decided that getting to the root cause of this and reversing it needed to become my #1 priority." In the press release (see the whole thing here), Jobs blames his weight lose on a hormone imbalance, says he's getting treatment and that he will stay on as CEO, and then closes with this salvo: "So now I've said more than I wanted to say, and all that I am going to say, about this." (Cantankerous analysis from Henry Blodget here.)

Hot gadgets not so hot. Just as the Jobs-free Macworld and this year's Consumer Electronics Show get under way, the Journal reports on a new survey from Forrester Research that provides "some of the first specifics about spending choices that consumers are likely to make." Newer devices fare the worst: 62 percent are less likely to buy a GPS navigation device and 63 percent are less likely to buy a smart phone. Standard tech purchases didn't do much better: 45 percent planned to delay purchase of a new PC.

Bursting Huffington's Bubble. AdAge columnist Simon Dumenco engages in some bubble bursting fun today, offering a financial smackdown of the Huffington Post, the left-leaning media startup that has been the subject of much media hoopla and that recently raised $25 million from venture capitalists. Dumenco says that rumors, which have pegged the site's value at as much as $200 million, overshoot the mark. He says that HuffPo is "ethically questionable" and worth a scant $2 million. It's an entertaining, vitriolic read, but is pretty light on actual data. Dumenco bases his number on three key data points: the market capitalization of Salon, a third party revenue estimate, and, I kid you not, a Simpson's episode.

How to recruit in a tough economy, part 2. Today's Journal tackles that awkward question that prospective employees sometimes ask during job interviews: "Isn't your company bankrupt?" It's been happening a lot lately, and the Journal says the best approach when you're trying to attract star players to your financially troubled company is honesty. Be upfront about your reorganization plans and offer bonuses if the bankruptcy lasts longer than planned. You'll also have to get comfortable hiring risk takers, who find the challenge of a turnaround exciting, but who may not fit with your company's culture.

Downsizing China. As companies rushed to staff up in China—either to cut costs or to reach that growing market—much attention was paid to the country's seemingly lax labor laws and low pay rates. But as growth in China slows, companies that expanded too quickly are learning that firing workers in China is a lot harder than hiring them, according to an article in Workforce Management: "Employers are unlikely to be able to lay off groups of workers using criteria usually reserved for firing individuals, like showing a worker is incompetent or has behaved improperly. Employers must show a change in the company's circumstances. For example, a company's decision to idle a plant could qualify. Employers must then attempt to find new work for the employee before giving that person 30 days' notice of his termination."

Avoid "the urge to purge." That's the advice of the Harvard Business Review's Bill Taylor who says that companies scrambling to cut costs risk falling into a pattern of "cutting first and asking questions later," and risk alienating their customers. "Make it mandatory that every time a brand or department or business unit moves to scale back and reduce costs, it also moves to stand out and strengthen relationships," he writes, adding that some investments—like being nicer to your customers—don't cost anything.

It's what you can do, not where you went to school. Paul Graham, the entrepreneur, angel investor, and writer, tackles the decreased importance of academic credentials in another great little essay. Graham says that degrees have come to mean less as the economy has become more entrepreneurial: "In a world of small companies, performance is all anyone cares about. People hiring for a startup don't care whether you've even graduated from college, let alone which one. All they care about is what you can do."

Last updated: Jan 5, 2009




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