Workers who wait in dread for the proverbial pink slip may be able to relax a bit. Not only may some of the worst of corporate "downsizing" be over, but some companies are cushioning the blow more for workers.
Some companies even realize there are alternatives to layoffs and firings, known in the corporate lexicon as downsizing, demassing or flattening the corporate hierarchy.
A recent study by the American Management Association found that of the 1,134 companies it surveyed, about half had downsized between January 1986 and June 1987, but only 17.4 percent said they would cut more workers in the next year. The survey also showed that manufacturing companies cut more people than service firms did, but almost a third of those surveyed said their basic philosophy is to avoid layoffs -- though many have had to resort to them. Smaller companies were most successful at avoiding layoffs.
"Workers can breathe easier, but not entirely easy," said Eric Rolfe Greenberg, project director for the American Management Association. He suggested that the results be treated as a baseline since some companies may not have decided to downsize yet.
Since 1979, as many as 1.3 million middle managers, upper-level executives and professionals have found themselves in the position that used to be left almost exclusively to hourly workers -- joblessness.
Though the bloodletting may slow because many companies already have made painful cuts, the forces of global competition, deregulation and hostile takeovers will continue to force companies such as General Electric Co., DuPont Co., Eastman Kodak Co. and Exxon Corp. to rethink the implied lifetime employment contracts they have had with their workers.
"Everyone seems to be doing it," said Robert Tomasko, a management consultant with Temple, Barker & Sloane who has written an upcoming book on downsizing. "When this happens, it is harder for some companies to face their corps of investment analysts without at least having studied the possibility of eliminating some staff."
No one denies that there was bloat in the American corporation. The upward direction of career paths as well as pay systems that rewarded position rather than talent encouraged creation of a now-endangered species of headquarters' staff, middle managers, technicians and supervisors.
"The race goes to those most flexible and least encumbered," said Ray Miles, dean of the University of California's Berkeley business school. "The first cut is something we called for the last 20 years."
But the danger lies in downsizing done with an ax instead of a scapel. Tomasko said wholesale cuts that are not accompanied by a radical rethinking of how the company should work create a false sense of security that gives a boost to companies' bottom lines but often obscures more fundamental problems.
"The biggest problem is companies think they solved their problem," said Tomasko. "They think it's too many people but often their products are lousy, they are out of touch with customers or technology has passed them by."
Companies also are learning that there can be unintended consequences of quick and dirty downsizing.
Consultants and outplacement specialists who have been tracking the aftermath of at least five years of serious layoffs and firings have found the workers left behind often are shellshocked, less committed to their jobs or insecure about taking risks in their work.
"There is a sense of surprise," said Larry Schein, senior research associate with the Conference Board, a New York-based business research group. "They realize for the first time their occupational mortality."
Companies that do not do sufficient planning before they cut also can find that as fast as workers are being laid off because their jobs are deemed obsolete, new ones are being hired.
Another problem is that job buybacks and early retirement offers can be indiscriminate, and often the wrong employes take the company up on its offer. AT&T, in the process of eliminating about 70,000 workers in the last few years, reserved the right to try to keep certain employes who opted to leave.
"But we were losing very good people whenever we had to downsize," said Hal Burlingame, AT&T senior vice president for human resources.
Finally, sometimes downsizing costs the company more than it saves as it hires outside experts and consultants to do jobs that were routinely taken care of in-house.
"Some companies may find some of the savings are illusory," said Paul Hirsch, professor of business policy at the University of Chicago Graduate School of Business.
For those that must go, the blow has been softened recently by a tremendous growth in outplacement and support services.
In questioning 210 companies, the American Management Association found that almost half offered outplacement support in everything from individual counseling (80 percent) to personal finance counseling (20 percent).
The primary reasons cited for helping employes are easing management concerns about long-term employes and improving morale among remaining workers.
That strategy seems to be working. The Conference Board, in laying the groundwork for an upcoming survey on middle management, talked to white collar workers -- many who escaped downsizing -- and found that they didn't blame the company for cutting back, but there was bitterness about how some of the first reductions were carried out. The sense, however, was that layoffs were now being done with more sensitivity.
"Clearly, there is the pressure to do things differently," said Schein of the Conference Board.
But the most bold downsizing initiatives of all may be those that do not involve pushing people out of their jobs.
Tomasko, who advocates planned downsizing over several years, suggests companies can get better results from more creative strategies. For example, he favors bringing work that has been contracted out back into the company, using across-the-board pay reductions and involuntary job changes, utilizing performance reviews to weed out laggards and making it rewarding for people to stay in their current jobs.
Even more dramatic is what Tomasko calls "mobilizing the troops" -- asking them to save their jobs through increasing sales or finding new markets. Workers also can be retrained, staff departments can be spun off to stand-alone businesses or companies can diversify based on the skills of their people.
Some companies have used these options with success. But some are looking even further ahead to the coming labor squeeze of the 1990s. "Some are wondering how they can get employes to stay and attract entry-level people," said Schein.
In the meantime, Hirsch, in his upcoming book, "Pack Your Own Parachute," suggests that workers store a finely tuned resume in their desks, keep their eyes open for alternatives and develop a free-agent mentality.
"It doesn't mean you have to jump ship," said Hirsch. "But know how to do it if you need to.