Injury is part of sports. And we are calling our latest strategy for corporate recovery as REHAB.
1 reply
Bloomberg is now raising the question of whether an activist investor could eventually step in. If that happens, the more interesting question is: what would an activist actually push to change?
At this point, it seems hard to avoid a serious examination of the company’s organizational structure and cost base. There appear to be far too many layers - VPs, Senior Directors, Directors, and ICs - along with a substantial reliance on outsourced third-party staff.
If PHK stays committed to EH, perhaps the mandate becomes a genuine restructuring: simplify the organization, eliminate redundant management layers, dramatically reduce external staffing, and reset accountability across the business.
Would a 10,000+ headcount reduction ultimately be required to materially move the needle? Maybe. But incremental cuts around the edges probably won't address the underlying issue if the real problem is organizational complexity and an entrenched cost structure.
A true activist playbook would likely be much broader: fewer layers, fewer overlapping roles, less outsourcing, clearer accountability, and a much leaner operating model. The remaining long-tenured employees would then actually have to become the change agents leadership keeps talking about - and prove the company can genuinely do more with less. If I'm EH I retire (again) and go live in my house in Tuscany while I spend/give away the $100M CEO winnings from the past 24 months. Too easy!