Unhappy new year: More layoffs '09

Nearly 1 in 4 companies plan layoffs, and 1 million job cuts are forecast, reports show.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Julianne Pepitone, CNNMoney.com contributing writer

Describe your online shopping habits this holiday season:
  • Iím spending more than last year
  • Iím spending less than last year
  • I never shop online
  • Iím not spending anything this year

NEW YORK (CNNMoney.com) -- As the recession has worsened, companies have ratcheted up drastic cost-cutting measures and layoffs. And 2009 doesn't look much better, according to two recent reports.

In a report released Monday, executive outplacement firm Challenger, Gray & Christmas Inc. predicted that more than 1 million jobs would be cut in 2009.

Last week, consulting firm Watson Wyatt (WW) said that 23% of companies surveyed in early December plan layoffs in the next year.

The report also said that 39% had already cut their work force - up from 19% in October.

"Companies are trying a multitude of actions to help trim costs," said Laurie Bienstock, national director of strategic rewards. "There's been a huge shift in the economy, and the numbers will probably be in flux until things settle down."

Cuts for layoff survivors

Included in that "multitude" are reductions for those spared in layoffs. In Watson Wyatt's October survey, 4% of companies said they had already implemented a salary freeze. By December, that number soared to 13%.

A further 19% said they planned freezes in the next 12 months, up from 12% in October, according to the latest report, which was released Thursday.

One in five companies has raised employee contributions to health care, and 17% planned to do so over the next year. Completed salary reductions jumped to 5%, up from 2% in October.

"Companies are taking five or six different actions to find the combination that's most effective for them," Bienstock said.

Merit raise budgets - cash that companies set aside for bonuses and rewards - changed the most dramatically, Bienstock said.

In December, 61% of companies said they planned to revise merit budgets; in October, 21% said they planned such changes, the report said.

"Companies are struggling with the attraction and retention of talent," Bienstock said. "At least in the short-term, a lot of people with critical skills are not in the job pool. They're staying put, and it's hard to draw them out."

Bienstock said more corporations are piecing together contingency plans and trying myriad options, so the recent flurry of activity may lead to a plateau in these numbers over the next few months.

"No one can make statements about what will happen in the economy, but over the next three months companies will start to see the impact of these changes," Bienstock said.  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
The 13 most WTF gadgets From the weird to the gross, these 13 gadgets will make you wonder why they even exist. More
Best-loved cars in America These cars and trucks topped J.D. Power's APEAL survey, which measures how much owners like their new vehicles. More
America's most powerful cars A new 'horsepower war' has erupted among U.S. automakers and these are the most potent weapons in their arsenals. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.