From 24/7 Wall St.: Why are some companies hated? The answer often depends on who is asking. Corporations can anger their customers, fail their shareholders, and mistreat their employees. 24/7 Wall St. analyzed each of these angles to pick the 10 most hated companies in America.
Nothing harms the long-term reputation of a company on Wall St. more than a steep, and often unexpected drop in its share value, particularly one that offers almost no chance of recovery. The stock prices of several companies on this list lost most of their value as they posted high double digits declines. In all of these cases this means a loss of billions of dollars in market capitalization.
This has certainly happened at Nokia Corp. (NYSE: NOK), which has been swamped by competition from Apple Inc. (NASDAQ: AAPL) and Samsung. It also happened at Hewlett-Packard Co. (NYSE: HPQ), which has been losing money for several quarters and continues to give up market share in the PC industry where it held the No.1 spot globally until recently.
Many of the most hated companies have millions of customers and tens of thousands of workers. With this kind of reach, keeping employees happy is crucial to more than just good office morale. Poor job satisfaction regularly results in low customer satisfaction.
One way to ensure low worker morale is by mass layoffs, which many of the companies on this list also have in common. American Airlines is one example. The airline, which has laid off many employees, has very unhappy workers, according to company and employee rating site Glassdoor. The bankrupt airline was also rated by airline consumer interests website Airfarewatchdog.com as having the rudest workers in the industry.
Many of the most hated companies botched product or service launches. Failures include the new layout and pricing of J.C. Penney Co. Inc. (NYSE: JCP) stores and the series of failed product releases by Nokia. As many of the problems at these companies are dependent, such failures hurt revenue, which in turn force management to cut costs — often by way of layoffs.
Several organizations might have made this list, but have had too many good things go their way in recent months. This includes Netflix Inc. (NASDAQ: NFLX), which made our list last year. Several bad decisions that hurt the company’s public relations in 2011, such as the increase in streaming fees, are well in the past. After a sharp drop in 2011, shares are finally recovering and are up more than 30% in the past three months.
It is worth noting that some of the companies on the list may have done very poorly by some measures but well by others. A few of the most hated companies have had good stock performances. Others may have satisfied customers. All of this was taken into account when the decisions for the final list were made.
24/7 Wall St. editors reviewed a variety of metrics measuring customer satisfaction, stock performance, and employee satisfaction. This included total return to shareholders compared to the broader market and other companies in the same sector in the last year. We considered customer data from a number of sources, including Consumer Reports, the MSN Money/Zogby customer satisfaction poll, ForeSee’s Holiday E-Retail Satisfaction Index, and the University of Michigan’s American Customer Satisfaction Index. We also included employee satisfaction based on worker opinion scores recorded by Glassdoor. Finally, we considered management decisions made in the past year that hurt company image and brand value from marketing research firms BrandZ and Interbrand.