October 30, 1995 in Nation/World

Corporation Layoffs Tend To Be Forever Survey Describes Aftereffects Of Downsizing Measures

Stephen Franklin Chicago Tribune
 

Considering the swath of jobs slashed by corporate America the last few years, it seems time to acknowledge what happens after a layoff and what mistakes companies might want to avoid.

These realities about the impact of the job churning within corporate America, a phenomenon nearly independent today of market pressures, come from a new survey by the American Management Association.

The annual survey studied downsizing by members of the New York-based non-profit group, which includes 8,000 of the nation’s largest firms.

What did it learn?

First of all, layoff survivors often put in longer hours since most companies want to avoid new hiring before they figure out how to share the increased workload.

Nearly 40 percent of the major firms in the United States with layoffs last year boosted workers’ hours or their overtime after they let workers go.

Next, temporaries or workers on short-term contracts, who, experts say, are sometimes dropped into the job without being given the company’s big picture of things, are swept up in the wake of layoffs.

Specifically, more than 50 percent of the firms that carried out layoffs last year followed up by increasing their use of temporary help-workers, who typically get lower wages and few, if any, benefits.

And for those who still cling, hope against hope, to dreams of getting their old jobs back, it is time for a reality check.

In many cases, the company not only eliminated you, but your job.

Only 6 percent of the firms that reduced their ranks last year hired back their laidoff workers for their old jobs.

“These are patterns we have not seen since the invention of the factory 200 years ago. Before, hiring and firing was always cyclical,” said Eric Greenberg, research director for the American Management Association.

“Downsizing is not the right word anymore,” he added.

As U.S. companies lay off workers, they are increasingly hiring new ones who tend to be in the professional or technical fields, he said. “Few companies are creating new management or advisory jobs,” he said.

While middle managers make up 5 to 8 percent of the work force, they generally account for 15 to 20 percent of the job losses as measured by the management group’s annual survey.

What has changed markedly in the survey over the years is the number of companies that pin their layoffs solely on business downturns. Only 6.2 percent of the companies gave this as the single reason last year, as compared to 21 percent two years ago and 43 percent five years ago.

The growing permanence of layoffs among corporations is indicated by the 29 percent of companies in the latest survey that say they expect to trim their work forces in the coming year. That is the highest rate since the American Management Association began these surveys eight years ago.

Another trend picked up by the survey is the decline in firms’ efforts to share the pain among workers as a way to stave off a layoff.

Five years ago, for example, nearly 70 percent of the companies offered demotions or transfers as a way to avoid layoffs. Last year, that figure was down to 43 percent, according to the survey.


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