"It's A Depression" - The Disturbing Email A Houston CEO Sent His Soon To Be Laid Off Employees

Tyler Durden's picture

This is the email that David Little, Chairman and CEO of Houston-based DXP Enterprises sent to his employees to explain why, "due to bank obligations and to continue a positive cash flow profile" the company has to freeze 401(k), why it is cutting pay in some cases as much as 60% and  why many employees are about to lose their jobs in the middle of what is an "oil and gas depression." It is a disturbing read.

Dear DXPeople,

 

As you well know, these are very challenging times for everyone in the oil & gas industry and other industrial markets. We are working hard to navigate both the challenges in oil & gas and an industrial recession plus what appears to be continuing softening. Normally, when upstream oil and gas is down the rest of the industrial market is booming, not this time!

This past Friday, we announced our fourth quarter and year-end results. Our revenues were down 17% from a year ago and 27% from the fourth quarter of 2015 versus the fourth quarter of 2014. Fiscal year 2016 has started off even weaker than we anticipated with January sales down an additional 12% from December. Oil and gas related companies across the country have reported sales declines as high as 50% - 60%. All of this in the midst of declining industrial confidence and performance. Furthermore, the forecast by experts suggests the oil & gas economy will get worse before it gets better. We are currently 20 months into this oil & gas down cycle which is also unusually long for a correction.

 

It goes without saying but over the past twelve months, we have all made efforts to contain costs and improve operations where possible. All, while focusing on growth. For this, we thank all of you for the sacrifices, discipline and effort you are making each and every day. But I am sorry to say that because of bank obligations and to continue our positive cash flow profile, we have to do more. The leadership team and I have been reviewing line-by-line every location, budget and expense, on how we can reduce costs while considering every decision through the prism of our values, culture and priorities. While we fulfilled a $2.9 million company match to our U.S. 401 (K) savings plan for 2015, we have determined it should be frozen immediately for the remainder of 2016. The Board of Directors, senior management and leaders in management positions will participate in a 10% reduction in base pay effective March 14th. Additionally, DXP as a whole company will require that we right size the company for our expected sales volume. This is in an effort to reduce labor costs while preserving as many DXPeople as possible in this uncertain economic environment.

 

We have all taken pay reductions over the last year with some of us taking reductions as high as 50% - 60% (via commission or bonus declines) including senior management. It is unfortunate, but the prolonged oil and gas depression and industrial recession has left us with no other choice but to make these difficult and unwanted moves and decisions.

 

The fastest and biggest cure to the health of DXP is more sales. Your expectations and mine are that the sales management, sales professionals and everyone else that touches our customers is working smart and diligently as we are all counting on you! DXP has given you some great weapons to be successful with and we are supporting and counting on your efforts to win each order. I am not going to list all the tools you have to win with, you should know what they are and understand how to use them already, but to use the “Hunter” and “Farmer” label you have to do both. “Farm” existing accounts to capture more of each customer wallet/spend and “Hunt” for new customers. We have the customer value propositions to sell and you have the selling skills to succeed.

 

Over the last several months, we have seen countless companies announce layoffs and in isolated incidents even bankruptcies. I point this out to try and put in context that the oil and gas depression is affecting more than DXP and is further reaching than many would have initially thought when this started over 2 years ago. The decisions we make are about preserving the future of DXP. DXP is a great company that is accustom to winning and we will win again. I can promise you that the leadership team will do all that we can to put us in a position to emerge stronger on the other side while staying true to our values and culture. Thank you for your understanding.

 

Respectfully,

 

David Little
Chairman & CEO
DXP Enterprises, Inc

And here is some more context, courtesy of the WSJ:

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Gregory Poonsores's picture

LOL I love how everything is a double digit fall, like in Alberta, except real estate prices.

Golf clap to the crooks at the real estate boards.

No one beats these guys for manipulated stats.

MalteseFalcon's picture

Couldn't happen to a better group of guys.

These oil-soaked bozos have had a free ride for 40+ years.

Shame about Peak OilTM being bogus.

Looked like the free ride was going on forever.

I need more asshats's picture

Here in Churchill Manitoba real estate prices have quadrupled in the last 10 years. No sign of slowing.

nuubee's picture

Hey, someone finally signed their name to the 'D' word... perhaps Obama will have this man waterboarded for peddling fiction.

CheapBastard's picture

Gee, I hope the economy doesn't get any "stronger."  It's the "robustiest recovery" I've ever seen.

0b1knob's picture

Oil workers should be glad they don't work at a big bank. 

Instead of a termination email they would be getting two taps to the head from a nail gun.

Manthong's picture

hopefully, at least 18 ga.

but, no, not for the energy guys, just the bankers.....

Look, monetary "policy" put us all here..  

Fiscal "policy" can fix it in a heartbeat...

... you just need the right guys calling the shots.

DeadFred's picture

No comment on who sent them or who was to receive them, nor will there ever be a comment.

Father Thyme's picture

Maybe it's time to fly down to Dallas and buy a nice used Oldsmobuick cream puff for cheap.

Muddy1's picture

These oil and gas bastards never wrote an apology to the American consumer apologizing for high gasoine prices.  They're getting what their greedy little minds deserve.  Meanwhile gasoline prices are up 27 cents a gallon the last couple of weeks.  Just in time for spring break travel.  What a coincidence.

Gold Pedant's picture

Yeah, because DXP had the market cornered. CORNERED, I tell ya! Bear rassled OPEC into submission and got them prices even higher than they would have been!

 

Sorry, that's not how a "market" driven by "commodities futures" "speculation" "works." I hereby unleash my quotation marks because you must be new here. Keep reading, and good luck!

VinceFostersGhost's picture

 

 

Meanwhile gasoline prices are up 27 cents a gallon the last couple of weeks.

 

Up 50 cents here.....uh huh......go figure.

ZD1's picture

 

 

While the price hovers around $1.75 for an average gallon of regular gasoline nationwide, it has moved above $5.00 at a station in South San Francisco. But across much of the state, the average price has jumped to around $4, according to GasBuddy.

California has one of the highest gas taxes in the country at about 40 cents a gallon -- roughly 10 cents more than the national average. Californians also pay a global warming fee (cap and trade) of up to 20 cents per gallon.

California also has tougher gas standards than those of the federal government and mandates the use of cleaner gas with fewer emissions. It costs more to refine because it's a special oxygenated blend that meets California's strict air-quality rules. Refineries have to use a specialized process, and only a few refineries are able to make California-approved gas.

 

http://247wallst.com/energy-economy/2016/03/04/gas-price-over-5-in-calif...

 

claytonmoore50's picture

The gasoline in Phoenix Az comes from refineries in Los Angeles by pipeline, but I just paid $1.39 for regular the other day.

People in Cali-Corn-Ya are getting hosed by thier government.

But, they elected them, so I dont feel sorry for the fools.

Redhotfill's picture

Wow so why is it $2/gal in St George UT just next to AZ?

Redhotfill's picture

Wow so why is it $2/gal in St George UT just next to AZ?

SFopolis's picture

Don't believe everything you read.  I just (15 mins ago) filed up in Downtown SF for $2.35/gallon.  Gas Buddy is on glue.

Squid-puppets a-go-go's picture

i havent up or downvoted you, not coz i dont care either way but becoz i care so much either way i dont know which way to vote ?!?

williambanzai7's picture

The optimal path is to just say Fuck You Ben Bernanke!

sodbuster's picture

"Fuck you Ben Bernanke!!!!"

effing idiot's picture

To: Muddy1 re: 'Oil & gas bastards' -- Stupid comment. I'm tired of everywhere I go, everyone I talk to saying the oil companies are gouging us. One of the most amazing, risky businesses out there. If you care to think of everything that goes into that gallon of gas waiting at your local gas station, or the natural gas quietly waiting on the other side of your stove-top burner you might wake up. If you want to rant about obscene behavior in the name of profits, think about the big banks. Money for nothing loaned out stupidly because you know your uncle has your back. The bill for bailing them out appears to be coming due, along with all the other unpaid bills racked up over the last 40 years. Most likely there will be something or somebody that will take the blame when the current paradigm comes to an end. Especially if that end is abrupt. Please quit being stupid.

Dragon HAwk's picture

And don't forget all the Taxes on gasoline Products.  what america needs is a good back yard  Refinerly,   except the Feds would smash it faster than My Moonshine Still

Not My Real Name's picture

Exactly. As I tell my statist father-in-law who loves to complain about the corner gas stations and Big Oil "gouging" us ... if the price of petroleum fell to $0.00 he'd still be paying close to a buck here in California because of Big Government gasoline taxes. The biggest profiteer on gasoline is the government ... not the local gas station.

Antifaschistische's picture

My interpretation...

"My bonus will be reduced to $2.1 million dollars this year.  That's down over 50% from the high in 2014.  We will all suffer together....except I will go home and suffer in my 11,000 square foot home in Hedwig Village, paid for with easy FED money and a LOT of debt that you are now going to have to pay for....thanks for taking one for the team"

Your President and CEO

Keyser's picture

This is closer to the truth than you know... In fact, it's practically verbatim from the O&G/CEO playbook... 

frankly scarlet's picture

Obama is a wuss...Donald would have the guys fingernails pulled with a pair of rusty pliers.

frankly scarlet's picture

Obama is a wuss...Donald would have the guys fingernails pulled with a pair of rusty pliers...in fact he'd do it himself....my kind of man.

EarthShine's picture

Donald is controlled opposition designed to appeal to sheep like you.

bamawatson's picture

Really? "controlled" by whom? How ? toward what ends?

Specific FACTS would be helpful. absent FACTS your comment is inane sophmoric gibberish

juangrande's picture

That's about 95% of the comments on this site.

Victory_Garden's picture

Seems there is sum truth to this. Listen closely to this speech by the Trumpman and hear his tone about isreal, and Iran.

Skip to min 20 to miss the long wait, and overly boring tune.

https://www.youtube.com/watch?v=TMGn2qttCmE

If Mr Trump is beholdin to isreal, he is bowing down to the same old lizard moneychanger god. That would be terrible. Their master is satanlucifer.

 

pitz's picture

After what, a 20 year depression?  Most of the cost of "real estate" (I assume you mean housing, not land) in Churchill is simply getting the materials up there (only accessible by rail) and finding sober people to slap something together.

DownWithYogaPants's picture

That's the truth. Asshat is constantly in his Craftmatic adjustable bed trying to get that 1 more cm of his own dick down his throat

flyingcaveman's picture

Broke your neck trying to suck your own dick?

flyingcaveman's picture

Broke your neck trying to suck your own dick?  If you can do that I would call that an ability rather than a disability

mctimm's picture

Who the fuck would want to live in Churchill where the population is mostly polar bears?

mt paul's picture

had to give you the down arrow
just because

DeadFred's picture

Maybe someone who has a 'thing' for polar bears? They are pretty cute don't you know?

OrangeJews's picture

A couple of Casinos have been put on hold again here in Vegas, Chinese money getting scared. 

 

Almost to the cliff guys, just stand back and watch everything go over it.

FreedomGuy's picture

I believe the supply of casinos worldwide is beginning to exceed demand.

e_goldstein's picture

Why go to a casino when you can sit at home and just buy stawks?

roddy6667's picture

Exactly. "Trading" is gambling, plain and simple. It is not investing or saving. It's a destructive compulsive behavior that always loses in the long run.

Kassandra's picture

Someone get me a White Russian...it's time to go bowling.

Tall Tom's picture

Wake me up when they close the NYSE Casino on Wall Street.

 

The NYSE Casino may need to open a Hotel and rent rooms if this keeps up.

Freddie's picture

Texans talk a lot of liberty and freedum shit but they backed evil LBJ as he killed JFK (against Fed and CIA).

Texans backed the criminal Bush clan and even vote for George Pedro for land commissioners who never shows up for work like Cruz and Rubio.

Now Texans are pushing this Canandian/Goldman Sachs Bush stooge named Cruz.

Menawhile - Texans did jack shit during and after Waco 1 and Waco 2.  Yeah just accept how innocent people are murdered enmasse in Waco.  Is Waco some demonic hell hole filled with satanists?