Large U.S. Companies Continue Downsizing: Unlike Recession-Era Cuts, Goal Is Efficiency
Even with their sales and profits rising smartly, America's biggest corporations are laying off employees and downsizing operations at nearly the same pace as they did during the height of the recent recession.</br></br>In its annual survey, to be released today, the American Management Association (AMA) found that 47 percent of its 7,000 member firms reduced their work forces in the past year, essentially unchanged from the two previous surveys.</br></br>Unlike earlier downsizings, which were responses to a slow economy or a drop in sales, the survey found current cutbacks were part of efforts by companies to improve their competitive position.</br></br>Increasingly, say management experts, downsizings are the result of new strategies to outsource non-essential work to other firms, adopt labor-saving new technology and realize efficiencies from mergers or acquisitions of other firms.</br></br>"It is a mistake to see downsizing as a one-time reaction to recession,Û said Eric Rolfe Greenberg, the AMAÛªs director of management studies. "Instead, it has become a system- "Downsizing is not an event any more," said Mitchell Marks, author of a new book on downsizings and a consultant with the Delta Consulting Group in New York. "ItÛªs become a way of business life.Û