When a company first starts out it will take them awhile to be profitable, even Pixar. For instance, back in 1985, Pixar (once the Computer Division of Lucasfilm) was in a sad financial state. Craig Good, a Pixar veteran, recently recalled a story of how Pixar bosses Ed Catmull and Alvy Ray Smith saved their employees losing their jobs.
Below is an excerpt:
[Lucasfilm president Doug] Norby was pressing Catmull and Smith to do some fairly deep layoffs. The two couldn’t bring themselves to do it. Instead, Catmull tried to make a financial case for keeping his group intact, arguing that layoffs would only reduce the value of a unit that Lucasfilm could profitably sell … But Norby was unmoved. As Craig tells it: “He was pestering Ed and Alvy for a list of names from the Computer Division to lay off, and Ed and Alvy kept blowing him off. Finally came the order: You will be in my office tomorrow morning at 9:00 with a list of names.” So what did these two bosses do? “They showed up in his office at 9:00 and plunked down a list,” Craig told me. “It had two names on it: Ed Catmull and Alvy Ray Smith.” As Craig was telling me that story, you could hear the admiration in his voice and his pride in working for a company where managers would put their own jobs on the line for the good of their teams. “We all kept our jobs,” he marveled. “Even me, the low man on the totem pole. When word got out, we employees pooled our money to send Ed, Alvy, and their wives on a thank-you night on the town.”
Head on over to The Harvard Business Review website to read the article in it's entirety. Having been unemployed since last December, it is always good to hear stories like this.