What Next at Andersen? as Company Cuts 7,000 Employees, Workers Scramble to Find New Jobs

By Comerford, Mike | Daily Herald (Arlington Heights, IL), April 9, 2002 | Go to article overview
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What Next at Andersen? as Company Cuts 7,000 Employees, Workers Scramble to Find New Jobs


Comerford, Mike, Daily Herald (Arlington Heights, IL)


Byline: Mike Comerford Daily Herald Business Writer

When Arthur Andersen LLP employees show up for work this morning in St. Charles, they'll be going to two sets of rooms, one for workers being laid off and the other for those spared.

Recorded messages telling 1,200 St. Charles workers which room to report to were placed to their workplaces and homes as late as Monday night. Andersen officials said the messages were necessary to expedite 7,000 layoffs across the country announced on Monday. Some departments, however, were handling the firings face-to-face.

As expected, the Chicago-area was hit worse than most areas across the country because the concentration of training and headquarters jobs here.

About 50 percent of St. Charles employees are being cut, or about 500 to 600 workers, according to reports the company would not confirm.

"I was in the room with some survivors (on Monday)," said Scott Ward, a partner in the Australian unit of Andersen, who has lived in St. Charles on and off for four years.

"There wasn't any joy in there," he said. "Everyone felt bad about the people let go, and everyone knows they still might be next."

Scott, 33, is being transferred back to Australia on Wednesday with his wife and two young children. Andersen's Australian unit is trying to merge with Ernst & Young International.

Staggered by a rapid loss of business from the Enron scandal, Andersen is slashing its U.S. payroll by 27 percent and analysts widely expect more to come when tax season is finished in late April or early May.

The Chicago-based Andersen is considering shrinking to a third of its current size, according to industry analysts, including Ray Whittington, director of the School of Accountancy and Management Information Services, at DePaul University in Chicago.

"I'd say their chances of survival are about 50-50 right now," Whittington said.

The layoffs, which Andersen had warned last month were inevitable, come with the firm's reputation in tatters, its overseas network fast disintegrating and more U.S. companies replacing it daily as their auditor and financial consultant.

As for severance, employees are being offered a week's pay for every year worked, with a minimum of two to four weeks, according to employees. In the meantime, they'll be allowed to use Andersen offices to seek other employment.

The 89-year-old firm employs about 5,300 people in the Chicago area.

Walking out of Andersen's Chicago headquarters on Monday at Monroe and Dearborn streets into the cold and rain, Barbara Koscielski, 30, of Oak Lawn, had just been told that she'd been fired. She pondered her fate as an expectant mother.

"I'm trying to stay focused on the baby," said Koscielski, who is seven months pregnant and has worked for Andersen's marketing department for three years. "Before I had a plan, and everything was planned out for me. Now, there's a lot of uncertainty."

The company said no breakout of planned cuts was yet available.

Experts say laid-off employees who were accountants working with paying clients will have an easier time finding work.

"Those in training, or support, internal accounting and people like billing clerks will have a more difficult time finding work," said Joseph M.

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