Having read "the writing on the wall" at his startup dot-com, Brian Geoghegan hustled to a pink-slip party, where 10 Denver-area recruiters paid $1,000 apiece to meet 200 job applicants while other high-tech firms found themselves wait-listed.
"We have jobs to fill," says Donna Crafton of party sponsor LH3, who adds, "It's a fallacy there aren't jobs."
If the dot-com shake-out has made pink-slip parties the New Economy's place to see and be seen, the Old Economy is sending its share of pink slips, too: DaimlerChrysler and Xerox this week joined a parade of blue-chip firms such as AOL Time Warner, Lucent, WorldCom and Motorola to announce mass layoffs in the last month.
Yet despite layoff announcements, joblessness continues to be near 30-year lows: Friday's report that joblessness ticked up to 4.2 percent in January also carried the news the economy created 268,000 net new jobs last month.
A second Labor Department report finds that mass layoffs of 50 or more employees jumped 54 percent the last three months of 2000, but it also noted:
- Almost half the downsizing came in manufacturing.
- California, with its rolling blackouts and energy woes, accounted for more than a fifth of all layoffs.
The message for the jobless or the job insecure? You are where you work.
Layoffs happening now are happening for a variety of reasons, including dot-com shakeouts, mergers and bad business judgments, experts say. If your employer is on shaky ground for whatever reason, better to know it now than later.
As economist Diane Swonk surveys the landscape for Chicago's Bank One, she sees an employment scene that reflects an economy that's slowed but isn't in recession.
Consumers splurged for years on cars and refrigerators and furniture and now have shifted to spending on vacations, recreation and personal services, she says: "People are buying back their free time," a fact that's reflected in the surge in construction and service jobs in January that more than offset the 65,000-job loss in manufacturing.
Car makers, manufacturers of household goods and others, however, should start seeing inventories fall and production pressures rise, with the Federal Reserve's full percentage point cut in interest rates the last month making its way to car and consumer loans, mortgage and business borrowing.
"Layoffs hurt if you're the one laid off, but scary layoff headlines, like loose recession talk, risk becoming self-fulfilling prophecies," says commerce professor Ellen Whitener of the University of Virginia. "If you have layoffs hanging over people's heads ad infinitum, the negative effect on worker morale can cut productivity as surely as layoffs do."
She adds that young, skilled high-tech workers have reason for hope should they get pink-slipped, but it's a different story for less skilled senior workers like those laid off by furniture factories being shuttered in North Carolina, where "industry towns are highly dependent on a few plants" and families who've spent generations working there can't easily afford to pack up and go.
Some employers have taken to pre-emptive layoffs to placate Wall Street, which is still hungry for spectacular 20-percent-a-year earnings growth enjoyed in the 1990s.
The upshot, says job placement expert John Challenger of Challenger, Gray & Christmas, is that businesses have moved to "just-in-time employment" policies, hiring workers for specific projects and firing them if business doesn't come through.
Challenger reports U.S. employers passed out 133,713 pink slips in December, the most since the firm started charting layoffs in 1993, and expects January layoff totals to top that as a sign of the slowing economy.
Slowdown or not, 33-year-old Denver job hunter Geoghegan is bullish about his job prospects after quitting one dot-com before layoffs came down.
"It was my first startup experience, and it was a great opportunity," he says. "Even though it didn't work out, I am looking forward to doing it again."
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