Company Downsizing in the Midst of Plenty

AT&T;, which had dramatically announced it was laying off 40,000 workers, has now greatly reduced its estimated cuts--citing such factors as more employees taking voluntary buyouts and job needs in growth areas. But would this cutback in cutbacks have happened if the layoffs hadn’t made so much news (overwhelmingly negative) and if GOP presidential candidate Patrick J. Buchanan hadn’t made downsizing a hot political issue? The downsizing at the telecommunications company where I worked for 15 years never made it into the papers, though its layoffs seem as capricious as AT&T;’s. Consider these experiences:

Last spring, the marketing department of my former company leased the back lot of Warner Bros. studios for an all-day “kick-off” meeting. Hundreds of marketing managers were bused from various locations into Burbank. Hundreds more were flown in from San Francisco and San Diego. We were all given T-shirts, mugs, calling cards, sunglasses, fanny packs--even disposable cameras to commemorate the occasion with.

Exultant speeches were made denouncing the competition and extolling company employees--we were called “invaluable” in the battle against the opposition. Though there had been layoffs in other departments, our jobs were secure, our bosses assured us, because we were the direct link to the company’s customers. We were fed a lovely lunch and entertained. Various “awards” for “excellence” were handed out.

The day ended with the vice president of marketing riding a brown stallion, surrounded by his assistants, also on horseback. He was waving triumphantly to the crowd of employees on their way to the parking lot. He reminded me of a prince greeting his vassals after returning from the Crusades. But this crowd was more intent on beating the rush-hour traffic than paying homage to their liege.

The event was rumored to have cost more than $3 million. Employees universally said: “It was nice, but I have a lot of work; if we are laying off people, why is the marketing department spending so much money on this event?” No one said this to the people in charge, however. We were the serfs in a kingdom, afraid to mention that the emperor had no clothes.

Six months after the day-long celebration, the vice president of marketing announced there would be layoffs in his department. It would be up to each division manager to determine the number of affected employees. Our division manager managed to get rid of about 40% of his staff.

One month after the layoff announcement, I was out of a job. Many of the people laid off had more than 25 years of service. They took a big cut in their pension benefits, benefits they had worked for year after year.

Two months after the layoffs, remaining marketing employees were flown to San Diego for a two-day, all-expenses-paid conference on coping with downsizing. Approximate cost this time was estimated at more than $1 million.

Conference attendees said among themselves that the money for the conference could have paid many salaries. No one dared say this to the people in charge. But the money wasted could have saved the jobs of many employees who were “downsized.”

What has been the result of these layoffs? Morale in the company is at a subterranean low. Remaining employees are suffering from numerous stress-related illnesses--including several nervous breakdowns and heart attacks--at least partly because of the workload they had to absorb. The legal department is overwhelmed by a number of wrongful-termination suits. Customers are angry because they are not receiving the service they expect, and are switching to the competition. And, ironically, the value of the company’s stock is dropping.

I am shocked that, on the issue of corporate layoffs, Buchanan and I are in agreement. Perhaps some companies are having financial difficulties, and have a legitimate need to downsize. For other companies, the decision to downsize seems almost whimsical. This whimsy is affecting thousands of people’s lives. If the company I worked for could find money for extravagant conferences, why were there no funds to keep employees on the payroll?*