Thread regarding Occidental Petroleum Corp. layoffs

The adjustment will be layoffs.

Increasing salaries for the same amount of work is actually one thing that causes inflation. So no, you can’t have ever increasing salaries and 0 inflation at the same time.

That’s one reason we have high inflation now. So many businesses looking for employees are having to pay higher and higher wages. They then pass that cost to consumers as higher prices. The other reason is extremely high government spending increases demand. Both of these together are very harmful.

@6xfl+, increasing employee costs without an increase in production is itself inflationary.

1. Companies cannot constantly increase their cost of doing businesses and stay competitive at the same time. If they pay more here, they must reduce somewhere else.

2. Employees are assets like any other asset. As an asset, you can charge more only if your value changes. If you can’t find a way to be more valuable, you can’t charge more. If you try to, some other asset will be willing to take your job. If you are an accountant with one year’s experience, and always work like an accountant with one year’s experience, your wages in terms of buying power will remain the same. Inflation may make your paycheck bigger, but inflation will eat up that increase. (That is unless you can make another employer think you are more valuable. Maybe you can once, but that will eventually catch up with you).

@6dro, even in a 0% inflation environment companies will still increase salaries to increase or maintain competitiveness.

The annual raise that you see as a worker is totally dependent on your supervisor and how much he or she cares about filling the online HR forms out so they are honest. Trust me, if done properly it is not an easy task for your supervisor. The line function above your supervisor most likely just normalizes the total raise amount if it exceeded what the larger group is allowed. So be kind to your supervisor and realize that they have many constraints to work with. Still, the best way to get lots of money is to get promotions by demonstrating that you can be trusted with the company assets. If you are in management assets also includes people. It’s that simple.

Sure, if your skills have increased since last year, you are now more valuable to the company and it will pay more for you given your increased value. If you are not more valuable, in a zero inflation environment, you would not get a raise, and wouldn’t deserve one. Yes you could bolt for a 5% raise that another company might pay you, but your old employer will just find somebody else they can pay your old rate to to take your place. You see, competition works both ways. You have companies that may be competing for skilled workers, but you also have skilled workers that are competing for jobs.

Companies don’t provide wage increases just because of inflation. They provide them because they need to compete. Competitors raise the rates they are paying for skilled people and other companies do the same. Inflation may be contributing to the competitor rate increases, but it is not the only or even main reason. Mostly companies need to pay more to hire people with skills. We should be asking for increases because there is so much competition for our skills and if we don’t get one then we’ll leave for a competitor. We shouldn’t be asking for an increase because of price increases.

You don't understand inflation. Inflation is the effect of price increases, not the cause. Yes, companies don't make a conscience decision to adjust wages for inflation, but when they do increase wages (not just yours, but all wages) due to "competition" or "market wages", they are reacting to inflation. Your individual wage growth over time is partly related to your increased value (hopefully) to the company due to experience. However, in a "no inflation" environment, this would be offset by higher wage earners retiring, being replaced by low wage earners. In reality, when wages for an entire class of employees (say accountants) goes up (and it does), that is a result of inflation.

In other words, if a company's products are priced at market prices, meaning they can't increase their prices to stay competitive, they are unable to simply increase wages year after year, or they will go under. If there is an increase in the demand for their products, this allows an increase in the price, thus allowing them to increase wages. It's simple supply and demand.

You may think your wage increases have nothing to do with inflation, but in fact, inflation is the primary reason. Call it competition or market, but the root is inflation.

You cannot separate all of the effects. Inflation is rolled into the annual increase as a market wage increase. If you want cost of living increases than work for the government for 50 cents on the dollar or go on social security.

We get an annual increase because the competition increases salaries, so the company keeps up to make sure they stay competitive. Also, some of the increase is tied to how well we perform. It’s not about inflation, it’s about staying competitive with what other companies are paying so they can and retain us and reward us while also attracting new talent. Being competitive and keeping up with other companies, not keeping up with inflation.

@2rwr+1iIVK34u is correct. Your annual salary increase is your inflation adjustment. Always has been. Those old enough to know will remember larger annual increases in years where the rate of inflation was higher. Why else would you get an annual salary increase?

That is correct. Oxy doesn’t care who stays and who goes. It is all about the money. Just look at the last two VSPs and all of the talent and experience that walked out the door.

There are not all the white collar office jobs as you may think. Tech and financial businesses are laying off. Big Oil is overstaffed just look at the Exxon and Chevron boards. Oxy will do what they want and could care less if you leave, or if many leave.

@2alk+1iIVK34u, can you share your source for this data, or did you just get it in a dream last night?

They better start paying up. Attrition is going to get much worse and it seems like next year is gonna get more wild than this one.

If anything, expect your 2023 bonus to be much lower. Inflation will also hit Oxy as an industry. They will have to do what it takes to not lay people off. One of those levers will be to not pay out as much of the bonus.

They will never have a specific inflation adjustment. Instead it will be hidden in the annual raises because the entire industry will adjust for inflation. Please remember that Oxy is not in the business of overpaying for labor.

Lot of post taken down because they had a political tone. I guess in our country politics does not play a role. I mean really none of the post were offensive and just a good representation of all of us. Politics and their policies do affect layoffs.

So @bbb+1iIVK34u, how many of the last 50 years had the CPI ( I’m going to assume you know what that is) gone down, meaning prices went down? I don’t mean specific items grasshopper.

I received no raises from 1983 thru 1988. New hires brought in to the company in 1989 started at a higher salary than those who were existing employees finding the grease. It forced the company to readjust our salaries to be competitive. You need to worry about the long game. Oil business is too cyclic to be nearsighted. I treated yearly bonuses and stock grants like non recurring events and saved/invested as much as I could. Helped to shave down the speed bumps during my career. Good Luck!

Prices will go down. Patience grasshopper. Instead of begging for an inflation adjustment for this temporary situation, how about you change your spending and cut back for a while?

Where are all the posters who said that prices were going to actually go back down so no adjustment was necessary?
Remember, you said high prices were going to reverse??

…crickets