Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, July 26, 1994 TAG: 9407270057
SECTION: BUSINESS PAGE: C7 EDITION: METRO
SOURCE: Associated Press
DATELINE: CHICAGO LENGTH: Medium
\ Paper pushers, beware.
Lawyers, accountants, data technicians and other number crunchers are the latest layoff targets as big companies slim down.
The largely white-collar computer and telecommunications industries have announced at least 78,000 layoffs this year, and other industries are following.
At Amoco Corp., Chairman H. Laurance Fuller said too many people were ``tossing pieces of paper back and forth and not having a whole lot of impact on the business.'' The petroleum company announced 4,500 mostly white-collar layoffs last week, its second major round of cuts since mid-1992.
Such seemingly straight talk from a corporate chieftain is rare.
Not since former IBM Chairman John F. Akers decreed in 1991 that there were ``too many people standing around the water cooler waiting to be told what to do'' had the public heard a prominent executive decry employee deadwood. IBM has since slashed nearly 50,000 jobs, almost 16 percent of its payroll.
Still, many management consultants and strategists say such sweeping statements from the boss are oversimplifications. In their view, businesses should do less chopping and more weeding.
``It plays well, but my guess is it doesn't really characterize exactly what the problem is,'' said Michael Useem, a professor of sociology and management at the University of Pennsylvania.
He said Amoco and other big U.S. companies are finding that old ways of doing business no longer work. Younger, more nimble competitors are forcing the giants to pare down by making smarter use of computers and contracting operations to specialized smaller companies.
Other big layoffs announced this year came from Digital Equipment Corp., GTE Corp., Pacific Bell, Nynex and AT&T.
The model is Xerox Corp., which has announced 12,500 job cuts since late 1991. About 1,700 of those jobs will shift to Electronic Data Systems Corp., which recently won a $3.2 billion contract to run Xerox's computer and communications network for 10 years.
Similarly, Amoco announced in April a plan to shed about 400 jobs in West Des Moines, Iowa, by selling its credit-card processing business to Associates Corp.
Dismissing these people as useless paper shufflers doesn't explain how they came to be cluttering up the office, said Mark Shanley, associate professor of management and strategy at Northwestern University.
``The rhetoric would seem to say the company has been lax in hiring a bunch of deadheads, but that's not the case at all,'' he said. ``What is now being called deadwood was just fine a few years ago.''
Corporate bureaucracies developed at a time when big companies could afford to keep armies of professionals on staff.
``Amoco is saying we just don't need 50 attorneys,'' said John Challenger, executive vice president of Challenger Gray & Christmas, a Chicago-based consulting firm.
He said 60 percent to 70 percent of laid-off white-collar workers go to work for smaller companies, and about 90 percent find equivalent or better-paying jobs.
by CNB