Many jobs may be lost forever Downsizing means that layoffs may become permanent.

December 16, 1991|By New York Times

The thousands of jobs being trimmed from the nation's work force by IBM, General Motors, Xerox and other major corporations are never coming back, executives say. That is the single biggest difference between the current economic slump and previous recessions.

The pace of announced cutbacks has accelerated sharply since October to 2,600 each working day.

"The recession was a lot worse than we thought, and it triggered this round of cutbacks," said George Davis, director of corporate human resource strategy at Eastman Kodak Co. in Rochester, N.Y. "But if it were just the recession," he said, "we would be hiring these people back again. And we aren't going to do that."

Like past recessions, blue-collar workers have been hit harder than white-collar workers so far. Blue-collar unemployment stood at 10 percent at the end of October, and white-collar unemployment at 4.2 percent.

Yet professionals, administrators and other desk-holders have also lost jobs in record numbers, and economists believe the white-collar occupations and service industries will come under further pressure in the years ahead, just as manufacturing did in the 1980s.

The recession has forced many companies to face up to the fact that during the expansive 1980s they got bloated, especially in the white-collar ranks.

Kodak is in the midst of a program that pays workers to retire early, and up to 6,000 are expected to accept the company's offer.

"Companies don't see improvement on the horizon, so they are moving now," said Garrett Dietz, a specialist in cost cutting at Towers Perrin, a management consultant. "Cutbacks show immediate change, and they make the corporate boards and Wall Street happy."

And John Stewart, a director of McKinsey & Co., a consulting firm, said, "These jobs are not going to come back after the recession, because a lot of companies are making fundamental changes in their structure and how they do business."

The most recent cutbacks were prompted by slumping sales and profits.

Some economists say they are concerned that the layoffs and the drought of consumer confidence combine in a vicious circle.

"Consumers and corporations are locked into a cycle of fear, with neither side moving until the other does," said Edward McKelvey, a senior economist at Goldman Sachs & Co.

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