As Layoffs Rise, So Does the Demand for One Man

Another company announces a big layoff, and John Challenger heads for the phone. The media will be calling.

Job cuts and layoffs are a favorite subject of news shows and newspaper stories, but the spotlight has become brighter recently as huge employers including AT&T;, Lockheed Martin and 3M announced plans to eliminate thousands of positions. Challenger has been caught in the glare, for a pretty simple reason: He’s counting ‘em.

In his primary occupation, Challenger serves as executive vice president of a family-run company in Chicago that helps people find jobs. But a side project--releasing tallies of corporate layoff announcements--has earned Challenger notoriety as an oft-quoted source of gloom-and-doom pronouncements about American employment.

“It is surprising how much attention that’s gotten,” Challenger said.

Challenger’s father, James, co-founded Challenger Gray & Christmas Inc. in 1962 to provide outplacement services, which means it is hired by companies to find jobs for employees that have been laid off. The firm also works as a consultant to companies that are planning staff cuts.

In 1993, noting a rise in corporate cutbacks, Challenger Gray started publicly releasing monthly and annual reports based on its compilations of layoff announcements.

Employees sift through about 70 newspapers and several computer services daily looking for mentions of layoffs, which are included in the reports only after being verified by the companies, Challenger said. The reports include rankings by state, region and industry.

The reports caught the media’s attention, and they’ve been mentioned with increasing frequency in major newspapers.

They’ve also been criticized. Detractors say that because the reports are based solely on announcements--and Challenger Gray doesn’t follow through to tally the actual layoffs--they don’t provide a comprehensive view of the national employment picture.

Challenger counters that the reports, which mainly include cuts by publicly traded companies and occasionally include government jobs, have never been touted as all-inclusive.

“We’re not getting every cut. There’s a lot of private companies, a lot of cuts that never see the light of day that we would never know about,” he said. “What I do think we’re getting is a consistent picture that you can look at [for] what’s happening out there in terms of downsizing and unemployment.”

Challenger also has an answer for those who suggest that he uses the layoff count merely as a publicity tool. “What I’m saying is let’s look at the issue and . . . help those people,” he said.

While the Challenger reports have stood as a major source for big-picture layoff numbers during the last few years, they do have competition. The Labor Department’s Bureau of Labor Statistics recently resuscitated its layoff reports, which were discontinued in 1992 because of budget constraints.

Challenger said he regards the government reports not as competition but as complementary to his mission to make the public more aware that the nature of the workplace and job security is changing.

“It’s tough out there right now,” he said. “Everyone has to . . . plan for periods of job loss and the emotional disruption and, often, dislocation that [they] can create. It’s a major issue that the country is facing.”

The idea of helping people through those tough periods is what brought Challenger into the family business.

A Harvard graduate, he joined Challenger Gray in the early 1980s after working a few years in sales and marketing for ITT Corp. Now 40, he works alongside his father, brother and brother-in-law.

Dealing with both displaced workers and downsizing companies, Challenger sees both sides of the workplace and offers alternatively discouraging and optimistic viewpoints.

When the company was founded more than 30 years ago, the notion that people would spend their entire working lives with one employer was beginning to change, Challenger said.

“It’s been under siege, really, in the last five or six years, with all the layoffs that have happened,” he said.

And more layoffs are expected, especially in industries such as banking, telecommunications and utilities that are being deregulated and face fierce competition, he said.

But, Challenger added, there are a lot of jobs being created, and the average time it takes to find a new job has become a little shorter lately--about three months in last year’s final quarter.

“At some point, these layoffs are going to stop . . . as companies see that there’s a competitive advantage to be had from having loyal, committed, long-term employees,” Challenger said. “But we’re not there yet.”