For Most Companies, Layoffs Are Tough to Avoid

Study: Six of Ten Companies Have Trimmed Their Workforce, and Almost Half Expect More Cuts in the Next Six Months.

Seattle, WA (Oct. 29, 2008) - The current economic crisis is clearly having a direct impact on the corporate workforce, according to a recent study by the Institute for Corporate Productivity (i4cp). The study found that 58% of polled companies have had a reduction in force (RIF) within the last year, and 39% foresee one coming within the next six months. In addition, of those companies that reported a RIF in the last year, almost half (48%) expect another cut in the next six months.

The reduction regimen is even more stringent in large companies. The study found that, in the last 12 months, 71% of companies with more than 10,000 employees said they have undergone a RIF, and more than half of companies of that size report their workforce will likely be diminished within half a year.

“In this uncertain economic climate, it seems that job elimination is inevitable for many firms,” said i4cp analyst David Wentworth. “While studies we conducted earlier this year showed that most companies were doing anything they could to avoid layoffs, it’s clear that not reducing the workforce has been impossible for most companies in today’s climate.”

In many cases, workers are given no notice that their jobs will be eliminated. Overall, almost 30% of firms said they offer no notice to employees who will be affected by a planned reduction. Twenty percent give a 30-day notice, 18% inform workers two weeks prior to the RIF, and a like number provide 60 days of notice.

When considering the pool of employees likely to be targeted in a reduction, most companies (66%) say they look at job position, followed by employee performance reviews at 59%. Almost half take the skills/knowledge of the worker into consideration.

How do companies deliver the news to workers? Seventy-six percent of companies say their managers meet face to face with the affected workers to deliver the news. Just over a third of respondents say they conduct group meetings with affected employees, and 24% report the reductions are announced in company-wide meetings. Surprisingly, more than 9% deliver the bad news via e-mail.

Regarding severance plans/packages for employees caught up in a RIF action, the majority of companies (60%) offer severance to all workers who are let go. Seventeen percent provide severance on a case-by-case basis. On the flip side, 9% of companies polled admitted they offer no severance to employees who have been cut. The amount of severance is most often determined by length of service in most companies, with 87% reporting it as the top choice, followed by job position (33%) and percentage of base salary (21%).

The Taking the Pulse: Reduction in Force survey was conducted by i4cp, in conjunction with, in October 2008. The total number of respondents was 314. The full results of the survey are available exclusively for all i4cp corporate members.

About i4cp, inc.

i4cp is the world’s largest vendor-free network of corporations focused on improving workforce productivity. Our vendor-free community facilitates innovation by giving our members – among the largest and most respected organizations in the world – access to:

1. Peers to spark new ideas and prevent “reinventing the wheel,”
2. Research to enable members to understand current practices and next practices,
3. Tools to put ideas and research into action,
4. Technology to enable members to easily access tailored information and execute workforce strategies.

With more than 40 years of experience and the industry’s largest team of human capital analysts, i4cp is the definitive destination for organizations seeking innovative ways to improve workforce productivity. For more information, visit