For release Feb. 15, 2002
Contact: Kevin Shay, LayoffWatch.
NOTE: Media members who wish to view a complimentary copy of No More Layoffs can request one by emailing us at LayoffWatch.
Many companies laying off workers showed good profits in 2001, new Web site and electronic booklet say
Booklet also shows how Andersen, the same company embroiled in Enron scandal, misrepresented a survey on layoffs in 2001
ARLINGTON, Tx. - One of the most overlooked stories of 2001 involved how many companies making huge layoffs made good profits at the same time. For example, New York-based financial firm Citigroup Inc. said it would slash 7,800 jobs last November after making $10.3 billion in the first nine months of 2001, $13.5 billion in 2000, and $9.9 billion in 1999. Citigroup went on to record a $14.1 billion profit in 2001.
This situation is explained in a new electronic booklet called No More Layoffs: How to Work For a Workplace That Works For All of Us. The roughly 16,500-word booklet, written by Texas journalist Kevin J. Shay, is offered online by Shay Publications at http://www.angelfire.com/biz/shaybiz/layoff.html. Shay, who was laid off himself in October 2001 from his reporting job at The Dallas Morning News, also started a Web site called LayoffWatch to monitor the profits of companies that lay off workers. The site is at the same Internet address.
Shay came up with the idea of starting LayoffWatch while doing some research on the vast number of layoffs in 2001, which were estimated by government and industry sources at between 2 million and 2.5 million, much higher than in recent previous years.
“Several Internet sites and organizations try to monitor layoffs as best they can, but it is a difficult trend to track,” said Shay, 42, who had worked for Belo Corp., the parent company of The Dallas Morning News and other media outlets, as a reporter and editor for almost a decade before being one of about 160 employees laid off last fall. “Usually only the large layoffs are announced so others go unreported. The U.S. Labor Department only tracks announcements of more than 50 workers. And companies don’t always follow through with the same number of layoffs announced. Then you have the problem of how to count all the part-time, temporary, and contract workers who are laid off and don’t qualify for unemployment benefits.
“I also did not come across many reports that pointed out how much companies were making in profits while they were laying off employees. That’s an important issue because it shows how many of these companies who justify laying off workers by saying they are losing money aren’t really doing so bad. So I decided to work on doing that, with a primary focus on linking what companies make to their layoff announcements.”
While it’s hard to get an exact gauge of layoffs, the 2.6 million Americans who were added to the federal government’s unemployed rolls in 2001 - mostly because of layoffs, but some due to other reasons - was the largest number in almost two decades. In 1982, some 2.8 million workers were added to the unemployment rolls, according to the Labor Department. The 46 percent increase in unemployed workers in 2001 - from 5.7 million to 8.3 million - was the highest annual percentage rise since 1974. Other indicators, such as unemployment rate and payroll employment, changed more than in any year in about two decades.
“I don’t think the reasons for all these layoffs have been adequately covered,” Shay said. “I started doing research on this subject after I was laid off because I wasn’t satisfied my company was doing as bad as it said. Belo did lose money in 2001 – about $2.7 million – but it made about $151 million the previous year. And it covered the loss in January by selling its interest in the Dallas Mavericks basketball team and the new arena. Yet, when I started looking into this and researching the finances of other companies laying off people, I learned a lot of other companies laying off people, such as the New York Times Co., are doing better than Belo. My theory is that companies are laying off people to turn back more of the control to employers, to reduce wages and benefits and stop employees from leaving jobs for better ones so much. In short, they want to turn the employees’ job market of much of the 1990s – when company executives were complaining about not having enough qualified workers - into an employers’ market again. September 11 had some effect on certain companies, but most of the job cuts in 2001 – more than 60 percent of them – were done before September 11.”
Backed up with footnotes and sources that are linked to Internet pages, No More Layoffs includes suggestions on what to do if you are laid off, such as filing employment discrimination complaints with state and federal agencies. The booklet also covers how to bring alternatives to layoffs like reducing hours to the attention of corporate and political leaders and the public. There is a directory of organizations and Internet sites - with Web site, email, and mailing addresses and other information - to enable readers to learn more and get involved with this cause.
During his research, Shay found that Andersen - the same Chicago-based accounting and consulting firm embroiled in the Enron scandal - erred in releasing results of a July 2001 survey on how layoff victims and survivors feel about the situation. An Andersen press release led with how the survey showed that “corporate survivors are more likely to disapprove of management’s decisions regarding layoffs than those who lose their jobs.” It backed up this conclusion by saying, “Only 37 percent of retained employees considered management handling of recent layoffs positive, the survey showed. Meanwhile, nearly half [46 percent] of workers who were laid off said their respective companies did an average job executing staff reductions.”
The problem was that Andersen was not comparing the same set of data. With retained employees, the firm only put the ones who responded good or excellent, while with those laid off Andersen placed those who responded good or average - no laid-off respondent chose excellent. If you compare the same data, then a full 55 percent of retained employees considered management to do at least an average job, compared to only 46 percent of those actually laid off. And 37 percent of retained employees said management did at least a good job, compared to only 20 percent of victims. Some 47 percent of those laid off said management did a poor job, compared to only 27 percent of survivors. So Andersen’s leading conclusion in its press release about survivors being more likely to disapprove than actual victims was dead wrong.
“If this was just an innocent mistake by Andersen, then it casts further questions on the accuracy of the rest of Andersen’s work,” Shay said. “But if Andersen’s press release was put out to purposely mislead people - to make it look like layoff victims didn’t think layoffs were that bad, and thus give managers more impetus to lay us off in the future - then a more sinister conclusion can be reached. It was probably just a mistake, but you never know.”
Shay also found that Fortune Magazine named Enron one of its “Best Companies to Work For” in 2001. The list was compiled well before Enron went bankrupt and thousands of former employees lost their savings in the company’s 401 (k) plan, and Fortune took Enron off of its 2002 list. “But that shows how people can be asleep at the wheel when it comes to reporting on large companies,” Shay said. “That shows there is a need for more monitoring of these companies.”
After working as a reporter and editor for several other Dallas-area newspapers and magazines, Shay started reporting for the Belo-owned Metrocrest News, which covered some Dallas County suburbs, in 1992. He joined Belo-owned Arlington News, a twice-a-week paper covering that city between Dallas and Fort Worth, in 1994 as news editor. Then he worked as an editor and reporter for the Arlington Morning News, a daily newspaper begun by The Dallas Morning News, from 1996 until early 2001. The Dallas Morning News turned the Arlington operation into a bureau in April 2001. Shay was a business and general assignments reporter for the Arlington bureau until he was laid off, with his last three months working directly under The Dallas Morning News’ business department. He is also co-author of And Justice For All: The Untold History of Dallas [CGS Communications, 2000], a 340-page book, with Roy H. Williams. Shay has also contributed to One World News Service, Minority Business News USA, Texas Catholic, D Magazine, Eclipse Magazine, and numerous other publications. He has a bachelor’s degree in journalism from the University of North Texas and is an Eagle Scout. He grew up in Dallas and lives in Arlington with his wife Michelle, and son, Preston.
A photo of No More Layoffs’ cover page and more information can be seen at LayoffWatch . The booklet can be viewed after paying $5 by credit card through a link on the Web site to Amazon.com or Paypal or by check through the mail. The appropriate Web site with the booklet will be emailed once payment is made and the reader alerts Shay Publications.
For questions and comments about LayoffWatch, the book, and this Web site, email us at LayoffWatch.
