Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Volunteers for a Beheading?

By

Time Magazine looks for 83 people asking to be unemployed.

PrintPRINT
All those willing to jump off the cliff, step forward. You'll be paid for your efforts.

Time Inc., part of Time Warner (TWX), proposes to cut payroll the old fashioned way: With a meat ax.

Of course, this invitation to a beheading is called a "voluntary buyout." However, if enough folks don't take the hint and accept the offer, easy-to-understand layoffs are next.

Job cuts are the quickest method to reduce payroll, and major companies have (as they say in the personnel office) announced plans to reduce headcount, including General Motors (GM), 3,600; Pepsico (PEP), 3,300; Goldman Sachs (GS), 3,200; and Fidelity (FBSI) 1,300.

But there are other, less bloody, ways to cut costs during the downturn.

After slashing expenses by completing 8,500 of 8,900 planned job cuts, Dell (DELL) found it wasn't enough. The computer maker then asked remaining workers to consider taking up to 5 days of unpaid vacation as part of the ongoing effort to reduce costs. That's limited pain for each employee, but significant savings for the company when spread over the entire workforce.

Perks also get thrown overboard by companies trying to stay afloat. In addition to job cuts, General Motors announced it would suspend its 401(k) match, cancel bonuses due next year, end its salaried tuition-assistance program starting next year, and reduce the number of weeks it pays workers under severance programs.

Gawker Media, the publisher of delightfully snappy and snarky websites, suspended view bonuses for its writers for at least one quarter.

Typically, such reductions are pitched as "voluntary," or made in the spirit of "shared sacrifice." Either way, it's a painful reduction in pay or benefits. But smart workers are grateful to be employed during the current downturn, because a pink slip now almost certainly means months of unemployment.

The unemployment rate is now 6.5%. The US Bureau of Labor Statistics says employment has fallen 1.2 million in the first 10 months of 2008, with more than half the decrease in the last 3 months.

That makes the planned reduction at Time, Inc. a variation on a now familiar theme.

The company is asking for at least 83 people to take voluntary buyouts in response to the continued erosion of magazine advertising.

It's hard to imagine a stampede to take the offer in the current economy, but if volunteers don't come forward by December 1st, there will be involuntary layoffs. The prospects are tough for mid-level staffers, who almost certainly would be forced to subsist on cheese and crackers earned by freelancing after losing a full-time job.

Sports Illustrated is looking for about 40 volunteers; People, 23 and Time, about 20. Fortune and Money are also asking for volunteers, but the number wasn't specified.

Magazines, especially secondary titles, may be going the way of the Sears catalog. But look on the bright side: You won't have ink on your fingers from pawing through classified newspaper ads when looking for your next job.

That's good news for everyone - except those unfortunate enough to work in newspapers.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE