Wednesday, March 04, 2009

Watson Survey: Worst of Layoffs May be Past Us

The worst of the layoffs may be behind us, as companies realize they can’t slash their way out of trouble, according to a new survey from Watson Wyatt.

They survey of 245 large U.S. employers conducted in mid February found that while more than half of companies (52 percent) have already made layoffs, the number of companies planning new layoffs has declined from 23 percent to 13 percent.

"Companies have come to terms with the fact that this recession is going to last and that they can't slash their way out of it," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. "Many companies are putting the drastic cuts behind them and are now focusing on smaller, more sustainable cost-cutting actions."

Those actions include hiring freezes (56 percent), salary freezes (42 percent), salary reductions (7 percent), reductions in 401(k) matches (12 percent), a shortened workweek (13 percent), raising employee health care contributions (22 percent), reduced training (35 percent) and travel restrictions (69 percent).

A whopping 69 percent of companies revised merit increase budgets in the past few months, with median increases declining from the 3.5 percent they originally planned to 1.5 percent.

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