Bad Tidings: You’re Fired Increasingly, Businesses Are Breaking The Bad News About Layoffs During The Holiday Season
There was a time, not that long ago, when you could look forward to the holidays, spending warm, happy times with family and friends, feeling safe and snug, at least for the time being.
The only clatter was the friendly sort, jolly ol’ St. Nick and his prancing reindeer up on the roof.
Now, with all too much regularity, comes a clatter of a different kind, much more upsetting, that can leave you sleepless and anxious about your future, instead of warm and snug in bed: Layoff notices.
Happy holidays in the 1990s.
Many of us cling to that image of the not-too-distant past, when employers considered layoffs just before Christmas verboten. Only the most hard-core Scrooge would even entertain such a thing as their employees, aglow in holiday cheer, merrily bought gifts for loved ones and friends.
So when a big company announces a huge payroll cut - as Zenith Electronics Corp. did last Wednesday when it said it was eliminating one in every four U.S. jobs at the company - the cold-heartedness of it still chills us to our bones like a blast of frigid winter wind.
But this is the Christmas yet to come. While not all is bleak - with jobless rates at their lowest in a generation, those out of work have a better shot at new work - holiday greetings on pink slips are becoming ever more common.
The corporate taboo has gone the way of the Christmas ham from the boss, lifelong employment and guaranteed benefits.
In sheer numbers, the layoffs of 1,200 by Glenview, Ill.-based Zenith are relatively mild. Consider downsizings of Christmas past:
The largest job cut announced in December in recent memory was 74,000 in 1991 by General Motors Corp., according to John A. Challenger, executive vice president of Chicago outplacement firm Challenger Gray & Christmas Inc. In December 1993, Xerox Corp. said it was eliminating 10,000 jobs. That year, RJR Nabisco Holdings Corp. said it was cutting 6,000 jobs.
And on Friday, another San Francisco bank, Wells Fargo & Co., said it plans to eliminate an additional 3,800 jobs, or 10 percent of its staff, by the end of September. Also Friday, Safeguard Business Systems Inc., based in Ft. Washington, Pa., said it was closing its plant in west suburban Addison, which will wipe out 130 jobs by the end of 1997.
But why announce these things in December?
“It’s not because companies are trying to play Scrooge,” says Eric Rolfe Greenberg, director of management studies for the American Management Association in New York, who conducts the association’s annual survey on downsizing.
There are other factors involved. Namely, the unfortunate timing of corporate planning, and the cold, hard facts of investor regulations and accounting.
“We are now in the period of the year when the planning process that began in the spring has come to its full fruition,” when companies “have a sharper definition of what the bottom line (for the year) is going to look like,” Greenberg said.
“This is the time, naturally, if those plans include staff cuts, that the final decision is made and the decision is announced. … This is the time you nail everything down,” Greenberg said.
“And once that decision is made, and it includes job cuts, there is an absolute obligation to report those cuts immediately because the stock market often moves on downsizing announcements, and the decision that jobs will be cut becomes insider information.”
This also is the end of the quarter, and for accounting purposes “you can take the entire costs of the job cuts - severance costs, administrative costs, early retirement costs, outplacement costs - and account for them in this quarter even though the actual payouts may not occur until the next quarter and for the next year or so,” Greenberg said. “And the next quarter looks a lot better.”
Put all those factors together, Greenberg adds, “you get a lot of companies acting like Scrooge.”