Rouse Co. layoffs set for the beginning of January will likely reap a dividend for the company and its stockholders, market analysts said last week.

"When you say that you're laying people off and cost-cutting, that's always a positive signal because you're cutting expenses," said Cathy Creswell, an associate analyst who tracks the Rouse Co. for Alex Brown & Sons in Baltimore.

A Rouse spokesperson confirmed earlier last week that "substantially less than 1 percent" of the company's nationwide work force of 6,000 would be laid off. The move was described as a necessary adjustment to scaled-back development during a suffering commercial real estate market.

"What we did was pro-active rather than reactive . . . it's not like we're throwing sandbags off the boat to keep it afloat," said one Rouse executive, who asked not to be named. He said that layoffs and curtailed development were done to help maintain the company's financial strength.

Despite its conservative development policy, Rouse also has suffered from a lack of confidence in the real estate development industry, a point both company executives and analysts agree on. After ending 1989 at $26, Rouse's share price hit a low of $10.75 about two months ago and closed at $16 on Friday.

The stock also had been suffering from a short-selling trend, which means investors borrow shares from a shareholder to sell and buy back later. Short-sellers gamble on a drop in share price to make a profit.

The number of Rouse shares borrowed for short-selling went from 6.2 million in October to 4.7 million in late November, Creswell said, predicting that the number will continue to drop, at least until the company releases a year-end financial report.

News of layoffs, coupled with the company's continued conservative development policy, should continue to boost the company's position in the market, Creswell said.

Land sales, office development and office leasing will be "greatly affected" by the layoffs, said Rouse spokeswoman Cathy A. Lickteig. She stopped short of saying that employees of the company's "bread and butter," its retail center operations, would be exempt from layoffs.

The company's 80 retail centers across the country are averaging about 5 percent above last year's sales, Lickteig said, which is "reason to be optimistic about our ability to withstand the current economic strains."

However, building major retail and mixed-use office and retail centers is not on the company's agenda.

"We don't have anything in development at this point, anything of the size of a mixed-use retail center," she said, which is "a bit of reassurance, because we don't have anything that's absorbing a lot of cash."

There are, however, a few projects in the works in Columbia, including a hotel and restaurant project at Route 108 and Lark Brown Road, the Ryland Group's new headquarters in Town Center and the Hickory Ridge village center.

"It's ironic that when Rouse slows down its development, it benefits in its cash flow," said Clifford F. Ransom, a market analyst who tracks Rouse for Ferris, Baker, Watts in Baltimore.

Because the company has continued to excel in mall retailing and slowed its development, Ransom said, "They're certainly doing much better than the industry as a whole."

Layoffs will not "hit disproportionately harder" at Rouse's Columbia headquarters and Howard County operations than it will elsewhere, Lickteig said.

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