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from the FIRE-sector-doing-bad-math-again dept.
The Intercept reports:
Bank of America Merrill Lynch downgraded Chipotle and warned investors that the stock will "underperform", complaining that the restaurant chain is paying its workers too much, and that cutting labor costs further will be difficult for the chain.
[...] Chipotle spokesperson Chris Arnold called Bank of America's analysis "flawed and inaccurate", adding that the restaurant chain hasn't cut employee hours but recently increased hours in conjunction with the addition of queso to the menu.
"That analysis is making estimates and conclusions about our management practices over a 12-year time frame from 2006 to 2017", Arnold told The Intercept. "Obviously, the scale of our business and labor wages have changed dramatically over that time frame. Drawing conclusions from 2006 and applying them as a directional change to our business over the past 12 months is simply flawed."
[...] "We continue to pay wages and offer benefits that are competitive and that reflect the priorities of our employees", Arnold said. "And with a commitment to developing and promoting people from within, we are providing significant opportunities for advancement."
The downgrade is a symptom of Wall Street's maniacal obsession with labor costs.
(Score: 0) by Anonymous Coward on Monday October 23 2017, @03:36AM (1 child)
There's software that does this. It's a problem that's been automated.
(Score: 2) by tomtomtom on Wednesday October 25 2017, @12:04PM
Yes, the rostering itself is easy to automate. But what I was trying to get at is that the second-order effects make a big real-world difference and optimising properly for these is hard and something that needs to be monitored continually. A couple of examples - what impact does it have on employee turnover, service quality, etc if you roster in longer shifts or shorter ones (longer shifts potentially means some wasted hours? How much employee flexibility should you allow in picking which days/times they work - at one end of the spectrum you could end up with very variable service quality if the same crew always work the same shifts so there is next to no overlap (and worse, good crews might not coincide with busiest periods) which could hurt your customer retention/growth but on the other hand if you impose some kind of rule e.g. "everyone must be available to be rostered at least one weekend shift per month" then you might be cutting some very good people out of your potential pool of employees. Even worse, the right answers to these questions will differ between markets, change over time and over the seasons (e.g. if you employ a lot of students).