Employers Cut Jobs – Not Perks, Pay

December 2, 2002 (PLANSPONSOR.com) - While layoffs continue to loom at a number of firms, perks and pay appear to be escaping the ax at most firms responding to a new survey.

According to the 2002 Layoff Trends survey by World at Work, only 16% of responding firms are trimming workplace perks, such as club memberships and expense accounts, about the same as a year ago.   In addition, only about 4% of companies have conducted pay cuts and just an additional 5% are even considering taking that step.

Layoff Targets

Still, more than half of the responding organizations have experienced layoffs in the past 12 months, and almost one-third (29.5%) anticipate layoffs in the next six months.   However, the survey’s authors note that what is perhaps more significant is who is getting laid off – increasingly technical staff in areas such as information technology (IT) and research and development (R&D).

Employers are continuing to consider a variety of cost-cutting alternatives, including:

  • 64% – Implementing hiring freezes
  • 58% – Reducing/suspending annual pay increases
  • 46% – Reducing/suspending bonuses
  • 28% – Granting voluntary severance
  • 26% – Granting early retirement
  • 26% – Job Sharing
  • 25% – Changing regular employees to contract status

The vast majority of respondents (95%) communicate layoffs via face-to-face meetings with workers, while 73% did so in small group meetings at the departmental level.

Companies for the most part are also providing employees with time to prepare for the change, with over half (53%) providing up to two weeks’ notice and 44% providing more time.