Layoffs slow, other cost-cutting eyed
New survey data from Watson Wyatt human resources consulting firm shows that 61 percent of employers expect the current economic downturn to last at least until the end of this year. Most companies already have made most of the sweeping changes they intend to make. In fact, the number of companies that are planning layoffs has fallen from 23 percent in December when the last survey was conducted to 13 percent in February when the most recent survey was conducted.
“Companies have come to terms with the fact that this recession is going to last and that they can’t slash their way out of it,” says Laura Sejen, global director of strategic rewards consulting at Watson Wyatt.
“With over half of companies reporting they have already made layoffs, they are now focusing on smaller, more sustainable cost-cutting actions.”
According to the survey of 245 large U.S. employers, 52 percent have made layoffs, up from 39 percent two months earlier. Also, 56 percent now have a hiring freeze in effect, an increase from 47 percent percent from December’s survey.
“This may be good news, as companies move more toward cost-cutting efforts other than work-force reductions in an effort to hold on to the workers they will need when recovery eventually comes,” said Laurie Bienstock, Watson senior compensation consultant.
Among other cost-cutting measures, 42 percent of businesses surveyed in February said they would institute salary freezes, up from 13 percent in the December survey; 12 percent said they intended to reduce 401(k) matches, up from 3 percent from two months earlier; 13 percent indicated they would introduce a shortened work week, compared with 2 percent in the December survey; and 69 percent said they intend to add travel restrictions, up from 48 percent in December.