In a sign that record-high levels of payroll cuts may ease in coming months, the number of employers that said they plan to lay off workers dropped steeply in a new survey of 245 large U.S. firms.
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March 6, 2009
SAN FRANCISCO - In a sign that record-high levels of payroll cuts may ease in coming months, the number of employers that said they plan to lay off workers dropped steeply in a new survey of 245 large U.S. firms.
Thirteen percent of large companies said they are planning job cuts, down from 23 percent who said that in December and 26 percent in October, according to the survey conducted in mid-February by consulting firm Watson Wyatt. More than half the companies surveyed employ more than 5,000 workers, and 80 percent of the firms have at least 2,000 employees.
Of course, plenty of those firms have already made job cuts: 52 percent said they've fired workers, up from 39 percent in December and 19 percent in October. Currently, about 11.6 million Americans are unemployed. In January alone, 598,000 jobs were lost, the steepest level in 34 years.
And other cost-cutting measures continue to paint a bleak picture for workers and job seekers: 56 percent of firms have a hiring freeze in effect, up from 47 percent in December, and 42 percent have frozen salaries, up from 13 percent in December. Of those planning salary increases, workers can expect a 1.7 percent raise, less than half of what companies planned to pay before the recession, according to the survey.
Twelve percent of firms have frozen their 401(k) match, up from 3 percent in December, while 13 percent, up from 2 percent, have instituted a shortened work week, and 69 percent, up from 48 percent, have put travel restrictions in place.
"Companies have come to terms with the fact that this recession is going to last and that they can't slash their way out of it," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt, in a press release. "With over half of companies reporting they have already made layoffs, they are now focusing on smaller, more sustainable cost-cutting actions."
A majority of the companies - 61 percent - said they expect the economic downturn to last through the end of the year, and 51 percent of the firms said they plan more cost-cutting measures ahead.
"As the business outlook remains challenging, employers are buckling down and making hard decisions," said Laurie Bienstock, senior compensation consultant at Watson Wyatt, in the release. "This may be good news as companies move more towards cost-cutting efforts other than work force reductions in an effort to hold on to the workers they will need when recovery eventually comes."
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