[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]