Firms Shave Costs Without Layoffs

Some workers willingly take wage cuts to save their jobs

By Ambreen Ali, Newser User

Posted Dec 22, 2008 9:00 AM CST

(Newser) – Some companies are finding creative ways to cut labor, and keep it, too. Brandeis University, for example, convinced 30% of its instructors to forgo 1% of their pay. "It can save a few jobs," reasons an English prof who's hardly alone. Many workers have accepted reduced hours, unpaid vacations, and wage freezes—even cuts—if it keeps afloat the company, and saves their jobs, the New York Times reports.

Dell, Cisco, Motorola, Honda, and the Seattle Times are among businesses that have tried to keep employees while shaving costs. They reason that the economy could recover as suddenly as it sank, forcing companies who laid off to shoulder rehiring and training costs. "In 2000, it was like 'cut the heads,'" remembers one business owner. This time, she axed holiday bonuses instead.

[Images (3)]

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Honda has extended unpaid furloughs for employees as it struggles to save its bottom line. (AP Photo/Koji Sasahara)

Some Nevada casinos employees have seen their work weeks shrink to four days. (Getty Images)

Dell has offered employees extended unpaid vacations in lieu of layoffs. (Getty Images)

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When they’re cutting an already taut organization, companies are leaving big gaps in the work force.
- John Challenger, head of a firm
that tracks layoffs

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Firms Shave Costs Without Layoffs