Satin Creditcare Network reports 23 per cent fall in net profit

You may not be familiar with Shere Khan from the recent movie musical, but around the world there are many companies and organisations like this: address books for bosses who remain in their job despite a general downturn in the economy. There were 20,000-plus contacts, for example, on the Sneezy electronic address book, which was popularised by Facebook. Somewhere, in this world, is also something called Creditcare Network, which helps CEO’s manage their contacts and, in doing so, is helping them stay in their jobs and avoid a financial crisis.

These bosses probably don’t realize it but they are pawns of Creditcare Network, and so are their clients. New technologies, changes in business strategy, business models, various trends in jobs, technology — all of this explains why fewer people are working, even though we are in a period of economic expansion. And yet companies like this stay in business, and their clients are probably unaware that such an arrangement exists. Let’s call a spade a spade. Most of the world’s successful companies have reached a peak in size, especially in relation to their overall costs, making them vulnerable to restructuring, new technologies and competition. We have seen signs of this in recent years with the restructuring at Target and Papa John’s pizza and in the precipitous decline in Kodak.

There are plenty of companies like that in the U.S. and others elsewhere. But let’s say that Creditcare Network and her bosses are doing something right: they probably have strategies that enable them to survive an economic downturn, and they are safeguarding the future of those they work with. That is, they are better at staying in business than, say, Kodak. How do we know? We have never been able to see what is going on in Creditcare Network. That is strange, since most corporate giants do give us insight into their operations. Kraft Heinz, for example, is very good at reporting the details of its manufacturing cycle and financial performance, and there are lots of other examples.

But, of course, some firms are better than others at reporting, and in almost every case we know about them from their shareholder reports. Creditcare Network, on the other hand, isn’t. And that’s the explanation for what is clearly going on. Creditcare Network is in trouble, it does not have a clue what to do about it, and she doesn’t want to let us see. We have no clear picture of what is happening in, we have no way of knowing how its businesses are growing, whether it is raising its prices, whether it is expanding its client base or whether it is restructuring. In any event, the bottom line seems clear. On an annual basis, our correspondent at Creditcare Network reported $333,320 in revenue for 2018, down 23 per cent. That’s $153,818 less than last year. Further down the income statement, the number of employed employees actually decreased by two per cent.

But those numbers don’t tell us how bad the corporate sector as a whole is. So we have to go back to the pay details. For example, Creditcare Network offers outsourced services and therefore falls outside the public sector. But as in the private sector, there are lots of people who do work in social and labour markets in which they are disadvantaged. And, conversely, the pay statistics are also muddied by factors like waitressing and tutoring, where the median income of participants is enormous.

But the big picture is unambiguous: in 2018 Creditcare Network had in the US only 504 employees, which is 0.001 per cent of the 7,652,000 people employed in America last year. Finally, it’s worth noting that we don’t really understand what is going on with Creditcare Network because we don’t know where she is in the story. The corporate sector continues to produce incredible amounts of profits but it looks like they are not going to spend all of it.

That, of course, is an interesting story, but it’s in the background. What is important about this is that companies like Creditcare Network generate great profits, but they do so at the cost of the employees and clients they are allegedly helping. All of this is consistent with an age-old argument about why private companies like Creditcare Network exist: they may be able to hide a lot of aspects of their operations, but they are more transparent about the prices they set.

The fact that they have to be so transparent about how they allocate those profits tells us something about their strategy. Is Creditcare Network passing along the savings they make from reducing turnover and suffering no restructuring costs? If so, they might still

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