US workers get even more resigned about layoffs

["Ian Murray" <seamus2001@xxxxxxxx>]

[NYT]
August 5, 2001
As Job Cuts Spread, Tears Replace Anger
By LOUIS UCHITELLE

[snip]

For the first time since the mid-1990's, American companies are
cutting loose many of their employees - announcing in the first half
of this year alone plans to eliminate some 777,362 jobs, compared with
613,960 in all of last year. But the usual protests and anger are
largely missing. In the first years of the 21st century, layoffs have
a new character. While it used to be traumatic to be laid off even
once, some employees can now expect to get a pink slip twice or even
three times before they reach 50. Layoffs are being spread more
even-handedly than in the past, hitting women as often as men, top
executives as well as clerks and production workers, good performers
as well as bad. And often, like Ms. Davis, the laid-off worker
reluctantly agrees with the business decision that put him or her on
the street.

The firings, for that matter, are often going hand in hand with
hirings. As companies lose workers in one department, they are adding
people with different skills for another. They are, in effect,
continually tailoring their work forces to fit the available work,
adjusting quickly to swings in demand for products and services. To do
that, companies are making ever greater use of contract workers and
temps like Ms. Davis, who earned $17.50 an hour.

"Flexibility is the most important ingredient of corporate success
today," said Eric Greenberg, director of surveys at the American
Management Association. "That involves a certain thickening of the
skin on both sides of the equation. Management is more thick- skinned
about letting people go, and workers are more thick-skinned about
accepting layoffs as a condition of employment."

There is balm to ease the process, though. Many companies are growing
more open-handed with severance and are spending more on outplacement
services for their departing workers. The outplacement industry is
booming. Right Management Consultants (news/quote), the biggest of the
nation's outplacement operations, with 140 offices in the United
States, signed on 26,400 newly laid-off workers from January through
June, more than double the 11,200 in the first half last year.

Self-interest plays a role in these sweetened departure packages.
Companies like Motorola (news/quote) and Cisco Systems (news/quote),
for example, are trying to generate good will, even loyalty, among the
departing employees - the goal being to make them amenable to return
when demand picks up. Cisco, which is shrinking its staff to 30,500
from 38,000 and paying six months' salary to those who sign severance
agreements, is also trying a 21st-century version of the old
industrial furlough. In a pilot program, it is paying 70 employees
one-third of their salaries while lending them to nonprofit
organizations for a year - in effect, warehousing them until they
might be needed. Charles Schwab, Texas Instruments (news/quote),
Accenture and other companies have similar programs to "park"
employees until the economy recovers.


WHEN that might be is unpredictable, of course. Announcements of job
cuts jumped to record levels in the first and second quarters, and the
percentage of the unemployed who left their jobs involuntarily has
risen sharply, to 36.3 percent in June from 28 percent in December,
the Labor Department says. If this pounding continues, a backlash may
develop reminiscent of the mid-1990's, when, for example, a Newsweek
cover article pilloried four prominent chief executives who had
downsized companies. "It used to be a mark of shame to fire workers en
masse," the article declared, reflecting the national angst. "Today
Wall Street loves it."

Wall Street still loves layoffs that promise to raise profits by
reducing labor costs. But the circumstances have changed. In the
mid-1990's, the economy had begun to boom and profits were rising, but
the layoffs happened anyway - prompting Newsweek to speak of
"greedheads." Adding to the popular frustration was a continuing
belief in the old social contract, in which companies and their
workers remained loyal to each other, through thick and thin. In the
American psyche, that belief had not yet foundered. Patrick Buchanan
came to prominence as a presidential candidate in 1996 partly because
he drew votes from workers who had lost their jobs or feared losing
them.

This time around, politicians have said barely a word about layoffs.
Although there have been some cases of anger, even violence, among
people who have been laid off, overt reaction has been minimal. In
part, that may be because the unemployment rate is only 4.5 percent,
encouraging laid-off workers to think that they can land new jobs
fairly quickly. And layoffs seem justified because economic growth has
slowed to a crawl, profits have plunged and stock prices have been
falling. The use of temporary workers, contract workers, outsourcing
and relocation to cheaper labor markets, meanwhile, has evolved into a
widely tolerated corporate strategy - and these practices require
layoffs to function. Frequency breeds familiarity.

[snip]