Many workers who have kept their jobs are being asked to leave something on the table.
For the last month, few days have passed without another report of layoffs at major companies, and the cuts seem to be accelerating the way a wave picks up speed before it reaches the shore. In the last month, Pepsi (PEP) announced it would eliminate 3300 jobs; Fidelity (FSBI), 1300; General Motors (GM), 3,600; Goldman Sachs (GS), 3,200. The list goes on: Job cuts in October alone totaled 112,884, up 19% from September. It seems no industry is safe.
Job cuts have been the first shoe to drop. It's a quick, though not painless, measure. But some companies haven't resorted to layoffs -- not yet, anyway -- and instead have decided to cut other things, such as salaries, vacation time and holiday bonuses. Normally, these measures accompany layoffs, or serve as a sign that they're on the way. Employees may get to keep their jobs - but they don't get away unscathed.
Dell (DELL), the computer giant, asked employees last week to consider taking up to 5 days of unpaid vacation as a way to reduce costs. Although the decision is "voluntary," employees are being urged to take the time off in the next 3 months. Dell is also offering voluntary severance packages to its employees and has a global hiring freeze in place. These measures follow in the wake of a nearly completed round of 8,900 job cuts.
General Motors is on the brink of extinction, and has thus thrown the kitchen sink at its employees. The automaker recently announced that it will suspend its 401(k) match, cancel bonuses payable in 2009, cancel its salaried tuition-assistance plans starting next year and reduce the length of time it pays workers under its severance and mutual-separation programs. Sadly, General Motors is a blueprint for a host of cost-cutting measures other companies might consider implementing.
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