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    A growing number of employers, hoping to avoid or limit layoffs,
are introducing four-day workweeks, unpaid vacations and voluntary or
enforced furloughs, along with wage freezes, pension cuts and flexible
work schedules. These employers are still cutting labor costs, but
hanging onto the labor.

    And in some cases, workers are even buying in. Witness the unusual
suggestion made in early December by the chairman of the faculty
senate at Brandeis University, who proposed that the school's 300
professors and instructors give up 1 percent of their pay.

    "What we are doing is a symbolic gesture that has real
consequences =97 it can save a few jobs," said William Flesch, the
senate chairman and an English professor.

    He says more than 30 percent have volunteered for the pay cut,
which could save at least $100,000 and prevent layoffs for at least
several employees. "It's not painless, but it is relatively painless
and it could help some people," he said....

    At some companies, employees are supporting the indirect wage cuts
=97 at least for now. The downturn hit so hard, with its toll felt so
widely through hits on pensions and 401(k) retirement plans and with
the future so murky, that employers and even some employees say it is
better to accept minor cuts than risk more draconian steps.

    The rolls of companies nipping at labor costs with measures less
drastic than wholesale layoffs include Dell (extended unpaid holiday),
Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada
casinos (four-day workweek), Honda (voluntary unpaid vacation time)
and The Seattle Times (plans to save $1 million with a week of unpaid
furlough for 500 workers). There are also many midsize and small
companies trying such tactics.

    To be sure, these efforts are far less widespread than layoffs,
and outright pay cuts still appear to be rare. Over all, the average
hourly pay of rank-and-file workers =97 who make up about four-fifths of
the work force =97 rose 3.7 percent from November 2007 to last month,
according to the latest Labor Department data.

    Watson Wyatt, a consulting firm that tracks compensation trends,
published survey data last week that found that 23 percent of
companies planned layoffs in the next year, down from 26 percent that
said they planned to do so in October. Companies say they are
considering other cost cuts, like mandatory holiday shutdowns, salary
freezes or cuts, four-day workweeks and reductions of contributions to
retirement and health care plans.

Posted by Yves Smith at 12:34 AM

Yves Smith

    * Industry: Investment Banking
    * Occupation: Management Consultant/Corporate Finance Advisor
    * Location: New York City : NY : United States

About Me

Although I believe ideas should stand on their own merit, rather than
on their author's credentials, I also recognize that readers want some
assurance that they are not quoting a 13 year old or a dog. I have
undergraduate and graduate degrees from Harvard. I have been working
in and around the financial services industry since 1980 and have had
over 40 articles published in venues such as The New York Times,
Institutional Investor, The Daily Deal, U.S. Banker, Bank Mergers &
Acquisitions, The Conference Board Magazine, BRW Magazine (Australia),
and Boss Magazine (Australian Financial Review).