The survivor: pocket picked from all directions
Published: Feb 27, 2009
The scene: Franklin Delano Roosevelt's first Inaugural Address
The quote: "The only thing we have to fear?is fear itself."
Just as applicable today, right? But for citizens who are still employed, there are new measures to fear besides layoffs, "weapons," if you will, to be used against them. Corporate executives have utilized a whole new arsenal of tools with which to cut costs. While nowhere near as crushing as the pink slip, all of them serve to reduce employees' standard of living, one way or another.
Gaining in popularity are furloughs, or forced temporary (non-paid) layoffs of as much as a week or two. These have been used extensively in the publishing industry (Gannett, Bay Area News Group, Media General) and manufacturing (Deere & Co., Piper Aircraft, automakers). It now appears, though, that the practice is making its way to white-collar workers.
Companies that don't want to force Worker X to feel both useless AND less of a breadwinner just take the simple approach by slashing salaries. And increasingly, it's not just the underlings getting the shaft. Amid increased scrutiny on management compensation elsewhere, senior personnel at Advanced Micro Devices, Cummins, Seagate and Caterpillar have all agreed to pay cuts. Ford execs are forgoing 30% of their usual salaries for two years. At one U.K. law firm (Allen & Overy), most of the partners were even asked to contribute up to $45,000 a piece to bolster the firm's working capital.
In addition, more than a few firms eased up on their commitments to 401(k) programs, health insurance benefits have slowly become less healthy, and perks disappeared. Heck, even Google cut back on hours at its free cafeteria and abandoned the popular no-cost Tuesday afternoon tea. So while the departed are surely miserable, those they left behind can now feel miserable too. Welcome to 2009.
--Posted by Todd Obolsky, Vault News & Commentary