Many Companies Eliminate Layoffs from Vocabulary Corporate Anorexia Shifts Thinking to Growth Mode

By Uchitelle, Louis | THE JOURNAL RECORD, June 2, 1996 | Go to article overview

Many Companies Eliminate Layoffs from Vocabulary Corporate Anorexia Shifts Thinking to Growth Mode


Uchitelle, Louis, THE JOURNAL RECORD


What a difference a few months make. When they agreed to merge this spring, Bell Atlantic and Nynex pointedly passed up an opportunity to announce the elimination of 3,000 "overlapped" jobs.

New markets would open for the merged company, they insisted, saving the workers from layoffs. "We think we will create enough new jobs to redeploy most of those 3,000 people," said Ivan Seidenberg, Nynex's chairman.

The emphasis is shifting. The rhetorical trumpeting of layoffs, as if they were a badge of honor, is disappearing. The negative publicity that descended on AT&T after it announced in January that it would eliminate 40,000 jobs was a turning point.

Now companies are choosing to highlight the potential for new hires down the road. Announcements are increasingly in the style of Bell Atlantic and Nynex, with their focus on growth to save jobs, and only a footnotelike nod of acknowledgment that the 3,000 workers might be laid off if the growth fails to materialize.

Rather than focus on shedding workers and lowering costs -- billed until now by companies like IBM, Sears, Roebuck and Xerox as the unpleasant but necessary means to the end of building sales by becoming more competitive and eventually adding jobs -- the rhetoric is changing to emphasize the end rather than the means.

Corporate America, and the consultants who help executives devise both the strategy and the rhetoric that describes it, are softening their earlier, harsher language, with its stress on sacrifice and survival.

But while the words are changing, reality isn't, at least not yet. U.S. companies are still cutting jobs, if more sotto voce.

"The pace of layoffs is way ahead of last year at this time," said John Challenger, president of Challenger, Gray & Christmas, a Chicago firm that tracks announcements of job cuts. They reached 230,350 through May, up 34 percent from the 171,924 in the corresponding period last year.

The shifting rhetoric is a reaction in part to the criticism leveled at AT&T, and in part to a political climate that has prompted candidates in this election year to lament downsizing.

But the shift also reflects an economic reality: At many companies, surveys show, job cutting has failed to bring the promised growth and hiring. The new rhetoric is an attempt to deal with this shortcoming, in language if not in deed.

The new approach shows up at companies like Allied Signal Inc., the huge manufacturer. Allied has taken pains lately to make clear that for every job eliminated or worker laid off in a shrinking division, like auto parts, a job is added, and usually a worker is hired, in a growing one, like chemicals, plastics and fibers, a point unstated before.

Conagra Inc., the food processor, while announcing in May that 6,500 workers would soon be laid off, noted that, in the words of Lynn Phares, a vice president, "our employment has grown by 10,000 since 1992, and we aren't eliminating as many jobs as we've created."

SBC Communications Inc. and the Pacific Telesis Group, which announced a merger on April 1, made no mention of layoffs. Quite the contrary, their press release spoke of creating 1,000 jobs at the new headquarters location in California "over what otherwise would have been the case if the merger had not occurred."

The shift reflects a new mantra, still being developed by management consultants, for how to justify corporate reorganizations that still cost jobs.

"The consulting industry is pushing growth much more than in the past," said William Matassoni, a partner at McKinsey & Co., the consulting firm. "There was too much emphasis on let's cut back, let's get rid of people, and not enough on how to grow once companies become leaner and more efficient."

The new rhetoric features such jargon as "growing the revenue line," which means increasing sales so that jobs can be added as business expands. …

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