Newspaper article THE JOURNAL RECORD

Big Companies Cut Down Bureaucracies They Built

Newspaper article THE JOURNAL RECORD

Big Companies Cut Down Bureaucracies They Built

Article excerpt

By Associated Press

CHICAGO _ Paper pushers, beware. The rush to re-engineer Big Business is putting corporate bureaucrats on the firing line.

Lawyers, accountants, data technicians and other number crunchers are the latest layoff targets as big companies reduce their management staffs to become more responsive to customers.

The largely white-collar computer and telecommunications industries have announced at least 78,000 layoffs this year, and other industries are following.

At Amoco Corp., which announced 4,500 mostly white-collar layoffs last week _ the petroleum company's second major round of cuts since mid-1992 _ Chairman H. Laurance Fuller said too many people were "tossing pieces of paper back and forth and not having a whole lot of impact on the business."

Such seemingly straight talk from a corporate chieftain is rare. Not since former IBM Chairman John F. Akers decreed in 1991 there were "too many people standing around the water cooler waiting to be told what to do" had the public heard a prominent executive decry employee deadwood and lard. IBM has since slashed nearly 50,000 jobs or nearly 16 percent of its payroll.

Still, such sweeping statements from the boss are oversimplifications, say many management consultants and strategists. In their view, businesses should do less chopping and more selective weeding.

"It plays well, but my guess is it doesn't really characterize exactly what the problem is," said Michael Useem, a professor of sociology and management at the University of Pennsylvania.

He said Amoco and other big U.S. companies are finding that old ways of doing business no longer work. Younger, more nimble competitors are forcing the giants to lighten up by making smarter use of computers and contracting operations to specialized smaller companies.

Other big layoffs announced this year came from Digital Equipment Corp., GTE Corp., Pacific Bell, Nynex and AT T.

Many of these restructurings are the result of "process re-engineering," the currently hot theory that old-line corporations must refocus on their core businesses and eliminate whatever _ and whoever _ doesn't contribute to profitability. …

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