ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, January 4, 1996 TAG: 9601040032
SECTION: BUSINESS PAGE: B8 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
HUNDREDS OF THOUSANDS of new jobs have been created through smaller, newly formed companies.
The headlines were all too common last year: 3M Cuts 5,000 Positions, Polaroid Eliminates 1,300 Jobs, Pink Slips For 1,200 At IBM ...
The trend in corporate downsizing - initiated at the start of the decade - is continuing in 1996, with AT&T Corp.'s announcement this week that it will lay off as many as 40,000 employees, mostly this year.
While AT&T had hinted at large cuts since deciding last year to split into three companies, the announcement nonetheless threatens to further rattle consumer confidence and keep economic growth in check, economists say.
``This is just another example of a major corporation laying off middle-management employees, [but] because these are high-profile layoffs ... it creates a level of caution among households,'' said William V. Sullivan, an economist with Dean Witter Reynolds Inc.
``There's a greater degree of anxiety about job security, income growth and making large purchases ... even though we still are creating new jobs, the economy is expanding and the stock market is reaching new highs.''
The most recent survey on consumer economic confidence by the Conference Board, a business-research group, showed a decline in morale during December. Fewer households surveyed believed jobs were plentiful, and as a result, they planned to make fewer major purchases in the near future.
This sagging sentiment comes despite the fact that the the nation's unemployment rate has remained at a fairly low 5.6 percent over the past 12 months and economic growth is expected to average 2.75 percent in 1996.
Some economists say growth would be brisker if it were not for the fear of layoffs.
Corporate America has been consolidating and downsizing at a furious pace since the start of the decade, eliminating hundreds of thousands of jobs in order to become more globally competitive and profitable. From January through October last year alone, 343,000 individuals were laid off, according to Challenger, Gray & Christmas, a Chicago-based employment consulting firm.
At the same time, though, hundreds of thousands of new jobs have been created through smaller, newly formed companies, noted Charles F. Albrecht, president of New York-based Drake Beam Morin, another large outplacement company.
``It's not all gloom and doom; there is life after the company you have left,'' said Albrecht. ``An increasing number of people are starting their own businesses or going into consulting. The trend is in jobs with smaller companies.''
Albrecht said recent surveys conducted by his company show improved job opportunities in biotechnology, computers and health services, and a decline in industries such as banking, manufacturing, government and aerospace.
Stephen McPherson, managing director for the New York executive search firm Ward Howell International Inc., says he's seen little change in the number of companies hunting for new employees in 1995 as in the previous year.
``All of us during the recession [of the early '90s] saw a huge influx of resumes,'' he said. ``That has declined as the economy has grown [but] ... it may be difficult to soak up the number of people who are being let go.''
Employment experts who specialize in finding white-collar jobs say it takes three to nine months on average for someone who is laid off to find work. Albrecht says 62 percent of the people his company has placed find jobs that equal or surpass the salaries of their previous positions.
Experts say the key to survival for AT&T employees as well as others who are out of work is in remaining flexible.
``Many people move into another area of interest or prior experience and take off from there. We call that spiraling,'' said Dianne Sundby, a clinical psychologist and director of Career Counseling and Assessment Associates in Los Angeles. ``It is tough, though, when you have a family and are used to a certain lifestyle since some people may have to relocate to find work.''
LENGTH: Medium: 74 linesby CNB