1. What justification does Salinger give for the layoffs at GTX?
James Salinger, the CEO of GTX, justifies the layoffs as a necessary measure to improve the company's financial health and safeguard its future. His primary reasons for the layoffs are to reduce costs, improve profitability, and boost the company’s stock price, which he believes is crucial to avoid a hostile takeover. Salinger argues that these cuts will make GTX more efficient and attractive to investors by increasing its short-term profitability. Furthermore, Salinger emphasizes that these actions are essential to maintain the company’s independence and prevent a takeover, which could negatively affect the company’s direction. He believes that downsizing is the most effective way to improve GTX’s competitive position in the market.
This approach reflects a shareholder-focused perspective, where the priority is to maximize returns for investors, even at the expense of employees. For Salinger, the layoffs are a pragmatic decision designed to keep GTX financially robust, at least in the short term, despite the toll it takes on the workforce.
2. What does McClary suggest GTX could do besides downsize?
Gene McClary, the CFO, challenges Salinger’s decision by suggesting that GTX could improve its financial situation without resorting to layoffs. McClary questions the ethics of cutting jobs while simultaneously spending millions on a new corporate headquarters. He sees this as a
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