More Firms Break Old Taboo by Laying Off at Holiday Time
The taboo against firing workers and announcing big layoffs around the holiday season--a practice once widely considered intolerably cruel--is fading fast.
Thousands of American workers, including many in Southern California, will sit down at their Thanksgiving tables today fresh from receiving pink slips during the past week from such high-profile companies as McDonnell Douglas and L.A. Gear. And many more employees are expected to be dismissed before New Year’s Day by firms hoping to start 1992 on a stronger financial footing.
The notion that this is an unconscionable time of year to dump someone is increasingly giving way to a sense of urgency among many employers that they must act swiftly to protect their slumping businesses. Although layoffs always increase in hard times, the latest round of dismissals may also signal a swing in the attitudes of U.S. business executives.
“There’s no time period that’s sacred any more,” said Dan Lacey, editor of the Ohio-based newsletter Workplace Trends.
Also, employers planning to impose major layoffs early next year are making announcements now because of legal requirements. Under a 1988 federal law, companies planning to dismiss 50 or more workers in most cases must notify affected employees at least 60 days in advance.
Companies will announce layoffs in coming weeks “because they are required to by law. It’s not that they want to ruin everyone’s holiday,” said Virginia M. Lord, a senior vice president of Right Associates, a major employee-outplacement firm.
Still, getting 60 days’ notice comes as small comfort to workers this time of year.
“They can tell you weeks in advance, and it’s still a shock,” said Dyanna Palmer, a 22-year-old production control clerk at McDonnell Douglas. She was one of the company’s 2,200 employees in Southern California who received layoff notices Friday.
Palmer and her boyfriend had planned to vacation in Nevada and Utah around Christmas, but “now we’re staying home.” And, she said, “I’m not giving any gifts. Everyone knows that now.”
“People can’t plan like they would normally for a joyous Christmas. It’s devastating,” added Bob Gamboa, political action director of UAW Local 148, which represents McDonnell Douglas employees.
Yet McDonnell Douglas, along with other employers making holiday-season layoffs, says it is acting out of economic necessity. “It was something that had to be done,” said spokesman Don Hanson.
“Certainly, there’s a great emotional impact if it comes at the holiday season, but these people will be working into January. I don’t know if that makes them feel any better or not,” he added.
Another major Southland employer, Food 4 Less Supermarkets, plans to begin laying off 300 workers Friday. The company, which owns Alpha Beta, Boys and other Southland grocery chains, said it is exempted from the 60-day notification requirement by its union contract.
“This has been an extremely difficult decision for the company to make, given the time of the year and given the current economic situation that exists out there,” said spokeswoman Adrienne Gaines. “We tried very hard to keep our employees, but we couldn’t,” she added.
There are no precise figures on the rise in holiday-season firings and layoff announcements, but the trend is apparent in various statistics. For example, initial claims for unemployment benefits during the last five weeks of 1990 totaled 2.95 million nationally, up 18% from the year before.
According to Workplace Trends, only two big, publicly held U.S. companies announced major staff cuts in December, 1988. By last December, the number had jumped to 18.
Economists expect more of that sort of bad news next month from many companies that are slumping amid the sluggish economy. “They feel forced to do something quickly,” said Audrey Freedman, a labor economist with the Conference Board research group.
Still, other employment experts see the year-end layoff trend as a reflection of an increasingly hard-nosed attitude among business executives.
“More and more, people are being viewed as disposable commodities,” said Gary Kaplan, an executive recruiter in Pasadena. “There’s a callousness the likes of which I’ve never seen.”
David Lewin, director of UCLA’s Institute of Industrial Relations, said the increasing willingness of U.S. companies to lay off employees around the holidays--as well as throughout the year--stems partly from their reluctance to find other ways to cut payroll costs. Many Japanese and European employers, he said, ask workers to share jobs or accept lower wages and benefits to ride out tough times.
Even if the inhibition on holiday-season dismissals is fading, the number of firings and layoff announcements is believed to be slowing from the pace earlier in the year. The U.S. Labor Department reported Wednesday that the number of initial claims for unemployment benefits dropped sharply in the week ended Nov. 16.
On top of that, Lord of Right Associates said, there is a tendency among employers to soften the blow of a holiday-season firing, at least for dismissed managers, by keeping them on the payroll through December.
She also said her company’s records show that more dismissed managers land new jobs during the second half of December than in any 15-day period during the year. The main reason: Many companies want to fill openings before year-end out of fear that if they wait any longer, the positions will be eliminated.
Some employment specialists contend that it’s more humane to tell employees about pending layoffs as soon as possible rather than to shelter them from the news until January. That way, workers can get a head start on finding a new job.
All the same, no one seems to be proud of letting people go around the holidays. For instance, Citicorp, the New York-based banking giant, announced last Dec. 18 that it was cutting 8,000 jobs.
Spokeswoman Amy Dates emphasizes that most of the dismissals were made before or after the holidays. “There is some sensitivity to laying people off right before Christmas. In no way were the majority of people laid off then.”
