Layoffs Continue, but Some Firms Are Getting Better at Softening the Blow

“Slice and dice” took on new meaning at appliance maker Sunbeam Corp. last week, when Chief Executive Albert J. Dunlap once again earned his sobriquet “Chainsaw Al.” Citing a “bad stumble” in company performance, he stunned employees with plans to shutter eight of 24 plants and eliminate 6,400 jobs, 40% of the work force.

Despite all the rosy economic signs, mass layoffs continue. Challenger, Gray & Christmas, an outplacement firm that has tracked dismissal announcements through the 1990s, says large-scale firings are almost up to what they were at the depths of the recession. Over the last half a year, the monthly average has been 48,900, compared with 51,000 per month in 1993, said John A. Challenger, executive vice president of the Chicago-based firm.

Mergers account for much of the pink-slip activity, but even healthy companies in cutthroat markets are using occasional layoffs as a quick way to bring costs into line. Thanks to years of practice--and changing attitudes on the part of workers, who frankly don’t expect much compassion from employers anymore--a few companies have turned firing into an art form.

Employees also recognize that they are more responsible for their careers in the new social order--and that job opportunities are more plentiful now than during the downturn.

In its most recent analysis of the job picture, the American Management Assn. reported that 73% of 1,200 members surveyed had created new jobs for the year ended June 1997, up from 68% in the previous 12 months. The share of companies reporting job cuts fell to 41% from 49%.

“Many of the [individuals] we work with have been through career transition before,” said Jay Soloway, area operations director in Pasadena for Drake Beam Morin, a national outplacement firm. “Not as much wind is knocked out of their sails.”

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To be sure, there are still plenty of horror stories about workers being herded into a room on Christmas Eve, summarily axed and escorted by armed guards from the building. Or of the poor schmo who arrives at the office to find that his computer password has been canceled.

And there’s AT&T;, which recently disbanded a consulting unit, stranding several highly paid contractors who had recently launched what they had presumed were long-term expatriate assignments. This is the same AT&T; that just two years ago saw its image ravaged because of its ham-handed handling of 40,000 job cuts.

But there are signs that companies are getting better at letting people go.

When Hewlett-Packard, the Silicon Valley tech giant, reorganizes, it puts affected employees into the “excess” category and gives them time to seek other jobs within or outside the company.

“When you’re employed, you’re employable,” said Alan Downs, author of “Corporate Executions” (Amacom, 1995). “There is still a certain stigma with being unemployed, particularly given the tight labor market.”

Aetna Health Plans “did an exceptional job” of closing a facility in Kansas City, Mo., said Lisa Haynes-Huxtable, a human resources employee who benefited from the benevolence and now works for the American Management Assn. Workers were given as much as two years’ notice and a generous severance package, including at least 13 weeks of pay. Mental health professionals and outplacement counselors were on hand, and the company supplied ample funds for retraining.

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What Aetna didn’t anticipate was that customer service would suffer because the company had a tough time hiring for its remaining big sites, many of them in tight labor markets. But the goodwill engendered by the layoff strategy encouraged many former employees to return temporarily--often working from home.

Alps Electric, the San Jose-based division of a big Tokyo company, recently shut a 500-employee facility in Garden Grove that made mouse components for Apple Computer. Workers got ample notice--six months to a year, well beyond the two months required by the federal government for plant closings--and the company communicated developments early and often. Retention bonuses kept people on board until the plant closed, and employees got time off to look for jobs.

Companies can give people “a soft landing,” said Ken Florence, a Beverly Hills labor and employment lawyer for the company.

For companies contemplating layoffs, here’s advice from David Harder, president of Careermotion, a Los Angeles organizational training and career development firm:

* Recognize that the company is part of the community; offer the same level of care for line workers that you would for senior executives.

* Reach out to the community for help in placing employees in other jobs.

* Educate employees, telling them how long their jobs might last and what they must do to stay employed. Explain the cycles of the business.

* Realize that the survivors might be in more distress than the people laid off. Have programs in place to help them too.

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Does your company have an innovative way of retaining employees? Tell us about it. Write to Martha Groves, Corporate Currents, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or e-mail martha.groves@latimes.com.