Employers: No layoffs here

Some companies are promising not to lay off any workers, even during times of financial hardship.

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By Jessica Dickler, CNNMoney.com staff writer

Do you know anyone who has lost a job recently?
  • I have
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NEW YORK (CNNMoney.com) -- In the midst of a recession, job cut announcements have become a daily occurrence. But some employers have promised no pink slips, and are sticking to it.

So far this week around 40,000 job cuts have been announced by an array of companies as varied as Dow Chemical, Electronic Arts, the National Football League and Sony Corp.

But even as the number of unemployed grows, some companies say their workers have nothing to fear.

"I have never in my 13 years [at the company] felt that my job is in jeopardy due to the economy," said Jill Kronman, a flight attendant for Southwest Airlines (LUV, Fortune 500).That's because Southwest is committed to avoiding layoffs at all costs - and they're not alone.

Both private companies - like equipment maker Hypertherm - and public companies like Lincoln Electric (LECO) and steelmaker Nucor (NUE, Fortune 500) had no-layoff policies in place long before the economic fallout this year, and have no plans to lift them now.

"We have a no-layoff practice that we have been able to follow going back to 1966," said Gregg Lucas, a spokesman for Nucor. "That no-layoff practice continues even today in the current challenging economic environment."

Others, like Southwest, FedEx (FDX, Fortune 500), Aflac (AFL, Fortune 500), Toyota Motor North America and Erie Insurance (ERIE) may not have a formal policy ruling out layoffs, but say that there is no history of layoffs and no plans to lay off workers going forward.

"We don't technically have a policy, but we've been in business since 1925 and never had a layoff," said Vanessa Paris, a spokeswoman for Erie Insurance.

"We've never had layoffs and we do not anticipate having layoffs," echoed Laura Kane, a spokeswoman for Aflac.

Cutting costs without cutting staff

Many companies are struggling, but layoffs aren't the only option for cost cutting. And many workers are willing to make sacrifices to improve the company's bottom line if it means keeping their jobs.

In a recent interview with Tom Brokaw, President-elect Barack Obama urged business owners to "figure out ways in which workers maybe have to take a haircut, but they can still keep their jobs, they can still keep their health care and they can still stay in their homes."

Some companies like Toyota keep workers busy during downturns with training sessions or classes. Hypertherm reallocates employees to departments where there is a greater demand for labor. Others choose alternative cost-cutting methods like hiring freezes or shorter work weeks.

Dean Gruner, CEO of ThedaCare, a Wisconsin-based health care system provider, instituted a no-layoff policy 18 years ago. To slash expenses in lean years, the company slows the hiring process and redeploys workers to other areas. "We can manage our staffing levels by being thoughtful about our turnover rate and redesigning the work that we do," Gruner said.

Jason Zickerman, president and CEO of the alternative board, a business coaching group, advocates this approach for all types of companies, even in times of financial hardship. Zickerman suggests offering employees shorter work weeks at reduced pay, encouraging employees to take sabbaticals or extend year-end breaks to avoid cutbacks.

If 20 workers took two weeks unpaid at the end of the year, "you're talking almost a full-time salary," he said.

Building loyalty without losing credibility

One of the major drawbacks to such a policy is the risk of failing, according Michael Chamberlain, senior vice president of Simpler Consulting. If companies instill such a policy but can't stick to it, that will deal a serious blow to their credibility. And, there will always be certain business conditions that the organization can't anticipate in the future, he said.

In addition, if the company has to go back on it's word, anything it says after that, "could be perceived as one more promise that will be broken," according Michael Maslansky, CEO of Luntz Maslansky Research, a market research firm.

But on the upside, many of the companies with no-layoff policies say that their employees are particularly loyal and hard working.

"If you go into one of our plants and see our people in action it'll be clear how productive and committed they are," Nucor's Lucas said. To top of page

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