The No. 1 Company Cost Cutting Move

Employers are trying to do everything they can to avoid layoffs, with permanent job cuts coming third among the top cost-cutting measures, says a new survey.

The Challenger, Gray & Christmas poll of 100 human resource managers in USA shows reducing travel expenses was the No. 1 move taken to reduce costs, with 66.7% of the companies chopping out-of-town visits.

Hiring freezes and reduced hiring came in second at 57.8% with 55.6% of the employers resorting to permanent layoffs.

“Many companies cannot cut their payrolls as deeply as they have in previous downturns, simply because they did not do as much hiring during the most recent expansion. As a result, they are forced to find alternative ways to keep their costs down,” says John Challenger, chief executive of the international outplacement firm.  “Companies that have thus far avoided job cuts may not be able to do so for the entire length of this recession, but by reducing costs in all these other areas, they may be able to limit the size of the cuts.”

One new trend:  across-the board pay cuts.

“In the past, companies were more inclined to cut jobs than reduce wages, reasoning that productivity would drop and turnover increase among high-performing workers,” says Challenger. “However, we are seeing a reversal in that line of thinking, due to the severity of this downturn and the idea that everyone, including the top executives, will have to make sacrifices to ensure the company’s survival.”

Download: Challenger, Gray & Christmas Press Release

How companies are reducing costs

Reduced Travel Expenses	66.7%
Hiring Freeze/Reduction	57.8%
Permanent Layoffs	55.6%
Cancelled Employee Holiday Party	32.0%
Other	31.0%
Reduced Or Eliminated Other Perks	29.0%
Salary Freeze/Reduction	27.2%
Reduced Year-End Bonus	26.7%
Cut Workers’ Hours	24.4%
Eliminated Year-End Bonus	22.2%
Temporary Layoffs	15.6%
Cancelled Customer Holiday Party	11.0%
Cutback Tuition Reimbursement	10.8%
Reduced Or Eliminated Matching Contributions To Employees’ 401(k) Plans	11.0%
Forced Vacation	8.9%
Four-Day Work Weeks	7.0%
Instituted Furlough Program	6.7%
Cut Office Space Through Increased Telecommuting	6.7%

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