December 20, 1995 in Nation/World

Workers Laid Off As Christmas Gets Downsized In The Global Marketplace, Bottom Line Is Not Good Will Toward Men

Donna St. George Knight-Ridder
 

There was a time when only Scrooge would have thought of firing a worker at Christmas.

But those days are gone.

As 1995 draws to a close, workers are getting pink slips at an accelerating pace.

Less than two weeks before Christmas, 2,700 workers at Kimberly-Clark Corp. - maker of family-friendly products such as Huggies diapers - were given the boot, amid a merger with Scott Paper Co.

On Tuesday, Polaroid Inc. announced it will eliminate 1,300 jobs in a restructuring designed to cut costs and refocus some of its operations. The job cuts amount to more than 10 percent of Polaroid’s work force of 11,300.

The bad news also was delivered in December to workers at First Security Corp., based in Salt Lake City. At America West Airlines in Phoenix. At Grand Union supermarkets in Wayne, N.J. At Knight-Ridder Inc.’s Press-Telegram in Long Beach, Calif.

Add those - and many others - to November’s avalanche at such corporate giants as IBM, 3M and AT&T.;

“It’s a taboo that’s being whittled away,” concludes John A. Challenger, executive vice president of Challenger, Gray & Christmas, a Chicago-based outplacement firm that tracks layoffs across the nation.

Layoffs in November were up 45 percent compared with last year, Challenger says - suggesting a resurgence in downsizing, which peaked in 1993. His firm counted 41,293 layoffs in November 1995, compared to 28,490 the year before.

Many in corporate America say that companies are largely doing what is needed to stay competitive in a global marketplace. The end of the year is the time when many budgets for the following year are made final, they say, and the decision to lay off workers becomes set.

“Business leaders are being pressured today to produce short-term earnings,” Challenger says. “And if you can’t raise prices - which many can’t - you look to the expense side and the biggest expense is wages.”

But Carrie R. Leana, a business professor at the University of Pittsburgh, is far more critical: “What used to be really unacceptable behavior has become the norm. The bar keeps getting lower and lower.”

Until the 1990s - before layoffs became so common - many companies avoided dismissing workers amid the glow of holiday cheer, not wanting to be cast as a coldhearted Ebenezer Scrooge.

For better or worse, the new corporate attitude is another sign of harsher times for workers.

In the last six years alone, 3 million American workers have lost their jobs. Today, analysts say the average worker should expect to change jobs six or seven times before retirement.

“The modern workplace has room for one thing and one thing only - and that is the bottom line,” says John W. Budd, a business professor at the University of Minnesota. “And the bottom line doesn’t have any provision for the holidays or anything else that isn’t profit-driven.”

For many workers, this is a painful reality.

Brian Connors, 36, a mechanic from Phoenix, says he feels deeply betrayed.

He worked for America West Airlines as it struggled through bankruptcy reorganization proceedings, enduring salary cuts and freezes, he says. The company assured workers that, in the end, they would be rewarded.

Now on solid ground again, America West fired Connors and 500 other workers in Phoenix three weeks before Christmas. The company expects to save $35 million over five years by contracting out for the services they provided.

“I went home from work one Friday, and I saw on the news that they had shut the plant down and they were turning the workers away,” Connors says. “I was dumbfounded. The company set out specific goals for us throughout the year, and we achieved the goals.”

Seventeen days after his firing, Connors is numbly reading a story in a national newspaper about his former employer. It is headlined: “High-flying Expansion Plans for ‘96.”

But an America West spokesman, Mike Mitchell, says that the company simply told workers as soon their fate was clear. “There’s probably never a good time to receive news that your job has been eliminated,” he says.

Mitchell points out that America West gave its workers a severance package and suggests that December is a good time to look for a job - when companies have just gotten budgets approved.

Overall, he says, if the layoffs help ensure the long-term viability of the airline, which has 10,000 employees, “that’s in the best interest of the majority.”

Downsizing became a way of business around 1990, part of a new era of mergers and restructuring, globalization and outsourcing. Inevitably, many analysts say, Christmas took part of the hit.

The biggest recent news in layoffs came in November from AT&T;, which offered 78,000 managers severance packages. It is unclear how many jobs the company intends to eliminate.

“It’s not a matter of companies wanting to play Scrooge,” contends Eric Greenberg of the American Management Association, supported by 8,000 companies that represent 25 percent of the American work force. “They don’t say, ‘Hey, it’s Christmas time, let’s make a whole lot of people unhappy.”’

Instead, Greenberg maintains, 1996 budgets are being approved, companies are squaring their books, and publicly held corporations must announce layoffs immediately because such “insider” information can affect stock prices.

There may be other forces at work, too. “If you reduce your work force now, you don’t have to pay people for the holidays,” says Paul J. Kostek of the Institute of Electrical and Electronics Engineers, whose 250,000 members have been hit hard by downsizing.

“It may be the Grinch Who Stole Christmas,” he says, “but people are looking more and more at the bottom line.”


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