Broad job losses called sign of corporate change

May 10, 1992|By Anthony R. Wood | Anthony R. Wood,Knight-Ridder News Service

Last year, it appeared that some of the nation's largest corporations were attacking their organizational charts with chain saws.

A wave of corporate staff cuts that highlighted the severity of the recession reached a crescendo at the end of the year as General Motors Corp. and International Business Machines Corp., said they would eliminate tens of thousands of jobs.

According to a survey by the newsletter Workplace Trends, U.S. companies announced more than 220,000 full-time job cuts in the fourth quarter.

The first quarter of this year brought a remarkable improvement, at least in cuts planned. The Cleveland newsletter said the number of announced cuts fell by about half.

'This will never reverse'

But don't be fooled, Dan Lacey, the newsletter's editor, cautioned. The improvement was an illusion.

The number of announced reductions paralleled the figures for the first quarters of 1991 and 1990. And the cuts likely will continue -- recession or no recession.

"This will never reverse," Mr. Lacey said.

Although his newsletter tracks announcements -- not whether companies follow up in making cuts -- and he acknowledged that his survey was incomplete, he said the available numbers underscored the fact that corporations were undergoing profound changes.

Those changes, he said, are symptomatic of the end of the post-World War II business cycle.

More shakeouts coming?

"Some companies may not have downsized at all yet," said Richard M. Stein, regional economist at CoreStates Financial Corp. in Philadelphia. "All the shakeouts have not occurred yet."

Just this week, Kraft General Foods Inc. said it would cut 1,000 salaried jobs, about 5 percent of its salaried work force in North America.

Stanley Duobinis, a senior vice president with Wefa Group, the Bala Cynwyd, Pa., economic forecasting firm, said a general trend of slimming down middle management would continue.

But meanwhile, jobs are appearing elsewhere, he said.

"All the new jobs are coming from firms you and I can't name," Mr. Duobinis said. "The story is all these guys who don't have a name."

He also said that not all the announced cuts were made. "We can't find all those job cuts that are supposed to be there," he said. He added, however, "They're still substantial cuts."

Two Pennsylvania companies that announced major job eliminations last summer say they have followed through.

Bell Atlantic Corp., of Philadelphia, said it would eliminate 3,500 positions through early retirements. A spokeswoman said last week that 3,200 employees had chosen to retire.

Unisys Corp., of Blue Bell, Pa., said it planned to cut 10,000 jobs by midyear. A spokesman said 9,000 cuts have been made.

Decline in quality seen

Mr. Lacey said his figures indicated a fundamental change in the nation's work relationships.

"What we're seeing in America is a decline in the quality of work, not the quantity," he said. The issue of recovery "is almost a moot or technical one," he said.

After World War II, workers could have expected to spend their careers with individual companies, he said. A generation of workers whose careers paralleled the postwar business cycle is now retiring.

Mr. Lacey said the so-called contingent work force -- temporary employees and other "non-traditional employees" -- is growing.

Mr. Lacey said the changes represented "the end of a four-decade experience.

"Oddly enough it's a return to normal," he said. "It is illogical that a given job should last a lifetime."

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