Season's Greetings, you're fired.
There is no wonderful time for a company to declare it's cutting jobs, but December announcements may be the worst. There's nothing like a pink slip to ruin someone's holiday festivities, and there's nothing like being compared to the Grinch who stole Christmas to make a business look bad.
"If a company is saying it's going to make the announcement on Dec. 18, we say couldn't they wait two weeks and do it on the second of January?" said Ann Wolfe, managing consultant at the outplacement firm Drake Beam Morin in Towson. "Otherwise it's, 'Ho ho ho, Merry Christmas, and by the way you don't have a job.' It's more humane and compassionate that way."
This year, U.S. companies have announced nearly 575,000 cut jobs -- the highest number since 1993 -- and many came in the month that is traditionally reserved for parties, bonuses and good cheer.
Citigroup Inc. said yesterday that it plans to eliminate about 3,650 jobs in the United States. On Monday, RJR Nabisco Holdings Corp. announced an additional 1,000 U.S. job cuts, and last week, MCI WorldCom Inc. said it would lay off 1,875 workers next year. Boeing Co. said Dec. 1 that it would cut 20,000 jobs over the next two years -- in addition to the 28,000 layoffs that were announced in July.
"At any time of year this kind of subject engenders a lot of emotion," said Peter Conte, a spokesman for Boeing in Seattle. "The holidays do make it more poignant. And for those that do not end up losing their jobs, those people become more thankful for what they have vs. what they may be losing."
Conte said the news media -- especially television and radio -- make heavy use of the not-so-merry Christmas angle when they report layoffs in December.
"They are drawing upon the drama of the situation and using that tool as a device to do that," he said, adding that company officials take such things into account when deciding on the timing of an announcement. "I believe there was some sense that it was better to announce earlier in the month than later."
Others say the taboo associated with December layoffs is waning.
"I think today companies are driven by competition and by Wall Street to meet extraordinary profitability figures year in and year out, and if they don't, their stock prices are hammered or the competition steals market share from them," said John Challenger, chief executive of outplacement firm Challenger, Gray & Christmas Inc. in Chicago.
"What you get as a byproduct of that is a constant focus on the bottom line by companies. And if you can't raise your prices or you haven't found a new product area that's taking off, the market demands that you make cuts.
Get it over with
"Often companies try to get them in at the year end, some don't want to start the year on a sour note -- they just want to get the business done. In the last three to five years it's been changing progressively. The holiday season is not sacrosanct," Challenger said.
Sacrosanct or not, it is on executives' minds.
Tom Arnold, vice president for human resources at the St. Paul Cos., which acquired Baltimore's USF&G; Corp. in the spring and plans to cut about 2,500 jobs, said the holidays do play a role in timing layoff announcements. The St. Paul Cos., for example, announced cuts in April and November.
"If something major is coming along, I think we have tried to avoid announcing in the Thanksgiving-to-Christmas range," Arnold said. "People think it's a special time of the year and they hate to ruin a celebration and season for employees. I think most companies at least look at that, and some companies certainly do try to avoid that."
Arnold said his company lets employees know that layoffs are being studied before a formal announcement is ever made, so that they have more time to prepare.
Edward Kemery, an associate professor of management at the University of Baltimore's Merrick School of Business, said he thinks companies are too quick to lay off workers in the name of higher earnings for shareholders. But if it's going to be done, he said, the announcement should come sooner rather than later, even if it means employees will have a blue Christmas.
"The ethical thing to do, obviously, is to let the affected employees know as soon as possible. To hide it until after December, when they know it will mean an additional financial hardship for employees, would be extremely unethical," Kemery said.
"My feeling is that it does create a more negative effect when [layoff announcements] are done around the holidays. Many people create a bond with an organization and they have a set of expectations that, 'I'll do my work and you'll take care of me.' It's similar to the way people feel about Christmas; it's something you can count on. Then all of a sudden they find out their whole world is turned upside down because what they counted on isn't there to be counted on anymore."
Pub Date: 12/15/98