(FORTUNE Magazine) – The holiday season did little to slow job cuts among the FORTUNE 500. Since September, Xerox, RJR Nabisco, Philip Morris, Baxter International, BankAmerica, ITT, Woolworth, and US West have announced they will shed more than 50,000 employees among them. Another 10,000 employees of the large drugmakers, including Eli Lilly and Warner-Lambert, will be facing the same unpleasant nostrum. But what's sour medicine for the rank and file seems to be viewed as a miracle cure on Wall Street. With a few exceptions, the stock prices of these companies have risen on the day of their layoff announcements. Shares of Xerox, for example, jumped 7% on December 8 when CEO Paul Allaire said he would be trimming the staff by around 10%, or some 10,000 jobs. The Street's enthusiasm for layoffs seems to be more than fleeting. As the table shows, share prices at companies that announced cuts earlier in the year have held up. Still, there's good reason to question the strategic value of layoffs. A recent survey by consultants at Wyatt Co., for example, showed that of 450 large companies that downsized in 1991 and 1992, only 60% have seen their costs shrink and fewer than half have improved their profits. Among firms that were gunning for increased productivity, only a third have actually achieved it. Reengineering expert Geary A. Rummler, a partner with the Rummler-Brache Group, argues that layoffs are ''an easy way out'' for CEOs ''who want to seem with it and on the ball.'' Rummler finds it ironic that ax-wielding managers are celebrated, since they're usually the ones who hired the ''excess'' 10% in the first place. Layoffs, says Rummler, are ''a major admission that senior management has really screwed up. It shouldn't be such a badge of honor.'' But try selling that view to the Street.

CHART: NOT AVAILABLE CREDIT: FORTUNE CHART CAPTION: WALL STREET LOVES LAYOFFS