Fewer U.S. companies planning big job cuts: survey
NEW YORK (Reuters) - Fewer U.S. companies are planning large-scale job cuts in response to a slowing economy than in past downturns, according to an upcoming survey of human resources executives by the Towers Perrin consultancy.
While most HR executives are "very concerned" about the impact of the U.S. economic climate on their company's performance, most also say they are prepared to deal with that impact, in part through targeted job cuts.
About 41 percent said they are likely to carry out small-scale, targeted job cuts aimed at reducing administrative costs, but not affecting revenue-producing parts of their companies, according to the survey, provided to Reuters ahead of its release next week.
Some 11 percent anticipate large-scale workforce reductions, said Don Lowman, Managing Director of the human capital group at Towers Perrin.
"Everyone is feeling like they need to be cautious about what's likely to happen with the economy," Lowman said. "Depending on what industry you're in, people either think we're heading into recession or already there."
The job cut outlook comes amid signs the U.S. labor market is slowing dramatically. The economy shed 63,000 jobs in February, the second consecutive monthly decline, defying expectations of jobs being added.
The consultancy polled about 500 HR professionals last month, mostly in the manufacturing, financial and services sectors of the U.S. economy.
Their top concerns included the weak U.S. dollar, the cost of energy, global competition, and the subprime crisis, the survey found.
In past recessions, between 40 percent and 50 percent of companies planned large-scale cuts, defined as cutting at least 10 percent of their workforce.
"The real question is, if 11 percent say they're likely to, how many will actually do it?" Lowman said. "This would suggest that in contrast to other downturns over the past 15 or 20 years, it will still be a number that's lower than in earlier downturns."
Towers Perrin's advice to companies managing through the slowdown is to focus less on cutting costs, and more on redirecting spending "surgically" to parts of the business that are vital to a company's strategy.
"Part of our advice would be to take a hard look at talent management needs over the long term," Lowman said.
(Reporting by Nick Zieminski, editing by Leslie Gevirtz)