Government and Cost-Cutting

Government officials have mastered the cost-cutting game, or should I say the cost-non-cutting game. The trick they have learned is that whenever budget or tax cuts are proposed, they threaten to cut the most critical expenditures.

Now, as I have pointed out, such behavior in a private company would result in one’s termination.

When I was in the corporate world, if I wanted extra funds for my projects, I would have to go in and say “Here are all my projects. I have ranked them from 1-30 from the most to least valuable. Right now I have enough money for the first 12. I would like funding for number 13. Here is my case.”

But the government works differently. When your local government is out of money, and wants a tax increase, what do they threaten to cut? In Seattle, it was always emergency services. “Sorry, we are out of money, we have to shut down the fire department and ambulances.” I kid you not — the city probably has a thirty person massage therapist licensing organization and they cut ambulances first. In California it is the parks. “Sorry, we are out of money. To meet our budget, we are going to have to close down our 10 most popular parks that get the most visitation.” The essence of government budgeting brinkmanship is not to cut project 13 when you only have money for 12 projects, but to cut project #1.

I can just see me going to Chuck Knight at Emerson Electric and saying “Chuck, I don’t have enough money. If you don’t give me more, we are going to have to cut the funds for the government-mandated frequency modification on our transmitters, which means we won’t have any product to sell next month.” I would be out on my ass in five minutes. It just floors me that this seems to keep working in the government. Part of it is that the media is just so credulous when it comes to this kind of thing, in part because scare stories of cut services fit so well into their business model.

Matt Welch has a great 8-point takedown of similar scare story on the current California budget crisis. You should definitely read it, but I wanted to add a #9 — this idea that the core, rather than the marginal, expense is always the first to be cut. From the LA Times:

Gov. Arnold Schwarzenegger has proposed slashing state spending on education by $3 billion to help close the budget gap, and the state would pay dearly for canceling classes, firing instructors, cutting class days and shortening the school year, experts said.

Promising students would go to other states, taking their future skills, earnings and, possibly, Nobel Prizes elsewhere. California companies would then find it harder to attract high-value employees who might be dubious about moving to a state with sub-par schools. [...]

John Sedgwick, co-founder of Santa Clara solar-energy company Solaicx, agreed.

“When you think about the genesis of Silicon Valley, it really started from its superior educational base” at Stanford and UC Berkeley, said Sedgwick, whose company makes the building blocks for photovoltaic cells. “That indicates that you don’t want to kill the goose that’s laying the golden eggs.” [...]

The only way the most “promising” students would be affected is if, when the schools cut back, the best professors (rather than the worst) are fired and the most promising students (rather than the most marginal) are denied admission for limited spots. Really? If Berkeley has 10 fewer spots, it’s going to start cutting admissions with the Physics wiz kid who had a 2400 on her SAT?

Further, is it really true that California only attracts people to its work force who went to school in California? A top Michigan or Harvard grad won’t do just as well? I went to college in New Jersey yet have never held a job in that state.

Now, I understand that part of the argument is that workers may not come if the local primary schools for their kids are bad. And that is true. But California has had poor performing schools despite years of high and increasing spending. Matt has much more on this in his piece.

Postscript: Of course, as crazy as it seems, there may be some reality to this threat. I could easily see the University of California system, when faced with the choice of cutting back on some post-modernist social science program or a physics program that has produced 7 Nobel Laureates, choosing the latter to cut in a fit of outrageous political correctness.

At the primary level, it is very possible that the bloated school administrations filled with rafts of useless assistant principals will choose to fire teachers rather than themselves. So unfortunately the plans to cut the most useful spending in a crisis and keep the most useless is not just a threat, it is a reality.

Layoffs for May 2009 at America's 500 largest public companies

May 30: Deere & Co ( DE - news - people ) lays off 89 in North Dakota and 16 in Louisiana as part of ongoing reductions.
Article Controls

May 29: Cintas ( CTAS - news - people ) projects worse than expected fourth-quarter results and lays off 650 workers.

May 22: Monsanto ( MON - news - people ) lays off 55 in Mississippi as part of manufacturing facilities consolidation.

May 21: UPS's ( UPS - news - people ) airlines arm cuts 80 mechanics on slump in shipping volume.

May 19: Hewlett-Packard ( HPQ - news - people ) announces 17% decline in quarterly profit and reduces workforce by 2% (6,400 workers).

May 19: Medtronic ( MDT - news - people ) cuts executive pay by 5%, freezes salaries and slashes upwards of 1,800 jobs.

May 18: American Express ( AXP - news - people ) reduces global workforce by 6% (4,000 jobs) adding to a 7,000-employee cut announced last October.

May 15: Following review of operations announced in February, Nike ( NKE - news - people ) cuts 1,750 jobs (5% of total workforce).

May 15: Fruit of the Loom--a Berkshire Hathaway ( BRK.A - news - people ) subsidiary--pink-slips 80 in Alabama.

May 12: Applied Materials ( AMAT - news - people ) posts quarterly loss and increases previously announced job cuts by 300.

May 11: Dell ( DELL - news - people ) slashes 260 jobs in North Carolina and blames the economy.

May 7: Cummins ( CMI - news - people ) idles Indiana plant that supplies Chrysler and lays off 610 workers.

May 7: DuPont ( DD - news - people ) adds to December job cut of 2,500 with another 2,000-employee cut.

May 6: Wells Fargo ( WFC - news - people ) freezes pension plans and fires 548 in North Carolina.

May 5: Microsoft ( MSFT - news - people ) pink-slips a second 5,000 employees following its initial January layoff.

May 5: Allstate ( ALL - news - people ) closes claims office in Florida and lays off 66 employees.

Satyam may 2009 lay off 5,000

Board meeting of Satyam Computer to discuss business strategies, is expected to take place on June 11 after the new owner, Tech Mahindra, assumed charge and one of the main agenda’s would be the company’s workforce. There are indications that the company might agree to lay off about 5,000 staffers in phases.

The meeting, scheduled to be held on next Thursday or Friday for the first time in the presence of it’s new board — six government-nominated members and four member from Tech Mahindra, is expected to discuss the company’s business strategies.

Vineet Nayar, the Tech Mahindra CEO, had said recently that Satyam has about 10,000 surplus staff and that the company would come up with the ‘least painful’ ways to handle this situation. Given the sensitivities of the situation, it is highly assumed that the board is likely to draw a consensus on the ‘lay offs’ which might be shaped up in forming about 5,000-10,000 people as the reserve/bench strength.

Reducing Staff in a Down Economy: Handling Terminations and Using Separation Agreements

Staff reductions and terminations have been an unfortunate result of the current economic downturn. So far this year, U.S. employers, seeking to cut costs, have eliminated more than a quarter million jobs. In addition to employees laid off due to economic considerations, underperforming employees and those that violate Company policies are less likely to be retained in tough financial times when the Company’s bottom-line is under scrutiny by corporate officers, boards of directors, and shareholders. However, employers must keep in mind that terminations cause more lawsuits than any other employment action, and anticipated cost savings can be negated by legal defense costs.

Despite the general rule that the employment relationship is “at-will” and can be terminated at any time, with or without notice, reason or cause, there are many exceptions to the at-will rule, making each termination open to potential legal challenge. Moreover, when the job market is difficult and terminated employees have a hard time finding work, they are more likely to pursue litigation against their former employer. In our practice, we are witnessing first-hand both the increase in terminations and the corresponding increase in lawsuits by terminated employees. This edition of the Employment Law Advisor focuses on handling terminations, using separation agreements, and the steps employers can take to reduce the risk of legal claims and liability in this challenging economic environment.
Terminations: The Legal Landscape

There are three categories of restrictions on employers’ ability to discharge employees: statutory, contractual and common law. Each restriction is a source of potential liability for employers. Statutory restrictions are those imposed by federal, state and local laws, such as laws prohibiting employment discrimination and retaliation. For example, it is unlawful under federal law to make a termination decision based upon an employee’s age, race, national origin, sex, religion or disability. In addition, Massachusetts also prohibits termination decisions based upon sexual orientation, ancestry, genetics or military service. Unlawful retaliation includes discharging an employee because the employee (i) participated in an activity protected by an employment statute (e.g., filing a complaint, testifying, assisting or participating in an investigation, proceeding or hearing) or (ii) opposed an employment practice prohibited by the statute (e.g., objecting to discriminatory hiring practices).

Contractual restrictions are those agreed to (or self-imposed) by the employer, including restrictions contained in employment agreements (e.g., employment for a one-year term). Contractual restrictions may also arise from statements made in offer letters or through other written or oral promises of continued employment for a specified period of time or unless discharged for “cause.” In some instances, an employee handbook or particular personnel policies may create explicit or implicit restrictions on the employer’s right to discharge employees “at-will.”

Common law restrictions are those created by the courts to protect employees from some types of employer conduct not prohibited by statutes. Such restrictions include prohibitions on discharges that violate “public policy,” such as firing an employee for refusing to engage in unlawful behavior on behalf of the employer. Massachusetts courts also hold that there exists in every at-will employment relationship a “covenant of good faith and fair dealing” that is violated when an employer discharges an employee in bad faith in order to avoid payment to the employee of earned compensation. There are also other common law claims that can arise from the manner in which a discharge is handled, including claims of defamation, false imprisonment and intentional or negligent infliction of emotional distress.
Steps Employers Can Take to Reduce the Risk of Claims and, Liability Due to Terminations

Employers should recognize that an employee termination may some day be judged by a third party (e.g., a jury) who may base its decision on the perceived “fairness” of the employer’s actions. Although legal challenges are sometimes unavoidable, there are steps employers can take to reduce their risks and to ensure that the termination process itself does not lead to additional employee claims.

1. Determine/clarify the precise reason(s) why the employee is being discharged. When a termination decision is challenged as discriminatory or retaliatory the claim usually turns on the employee’s ability to show that the reason given by the employer is untrue. When an employer says one thing at the time of termination (sometimes to spare the employee’s feelings) and something else later to the court or investigating agency, the employer’s ability to defend the case may be severely impaired.

2. If discharging for misconduct, be certain that there was a thorough and objective investigation of the employee’s conduct. Was the employee given an opportunity to explain his or her side of the story? Have any admissions by the employee been documented? If discharging for poor performance, determine whether the performance problem is well-documented and demonstrable.

3. Avoid surprise. Determine whether the employee was given prior notice that his or her misconduct or continuing poor performance would result in discharge. While not legally required, notice generally is expected by courts and investigating agencies, and the failure to provide notice is viewed with great suspicion (except in those situations involving egregious employee misconduct).

4. Consider the appearance of unfairness, given the potential that the employer’s actions will be judged by a third party. Is discharge clearly warranted for the employee’s misconduct or poor performance? Are there any mitigating circumstances? How have other employees been treated in similar situations? These considerations are of particular importance when a potential discrimination or retaliation claim exists.

5. Review the employee’s personnel records and any documentation relating to the discharge: (i) to get an accurate picture of his or her work record; (ii) to make certain the documentation is complete; and (iii) to remove any materials that do not belong in the file.

6. Review any employment agreements, offer letters, and pertinent personnel policies to determine whether the employer has complied with all requirements, including any notice prerequisites.

7. Assess whether there is any particular vulnerability to legal challenge. Is the employee a member of a protected group (e.g., age 40 or older)? Has he or she exercised a legally protected right recently (e.g., taken Family and Medical Act leave, requested reasonable accommodation of a disability, filed a complaint of discrimination or harassment)? Are there any contractual restrictions to discharge? Are any public policy issues involved (e.g., the employee objected to doing something because of legal or ethical concerns)? Will the employer arguably be in any way unjustly enriched by the discharge (e.g., the employee loses a bonus or commission due to the timing of the discharge)?

8. Plan the termination meeting carefully, taking into consideration the dynamics of the situation. Who will be present? (More than one employer representative should attend.) Where and when will it be conducted? Be discreet. Avoid a “termination march” past co-workers. Avoid causing unnecessary embarrassment or emotional distress to the employee.

9. Be truthful and accurate in telling the employee the reason(s) for the discharge, in a direct but respectful manner. Present the decision as definite and final (assuming it is). Offer support, but not in terms of reversing the discharge decision. Be knowledgeable and prepared to discuss the employee’s termination benefits, including any severance pay, any accrued vacation pay, group insurance continuation, the form of reference the employee will receive, and the employer’s position on unemployment benefits. Also be prepared to discuss any transition matters and any continuing employee obligations (e.g., non-disclosure and/or non-competition restrictions). Prepare a memorandum documenting what was said in the meeting.

10. Provide the employee with a final paycheck. The Massachusetts Payment of Wages Act, M.G.L. c.149, §148, requires that discharged employees be paid their full and final wages on the date of discharge, and the Act provides substantial remedies to employees for violations. Final wages include pay for all accrued and unused vacation time as well as commissions or potentially bonuses earned but not yet paid. Employers should not make any irregular deductions (e.g., for equipment not returned, property damage or outstanding loans) without careful consideration of the potential legal ramifications.

11. Provide notice of the employee’s (and other beneficiaries’) rights regarding health insurance continuation under federal law (COBRA) or state law.

12. Massachusetts law requires that employers provide terminated employees with a notice from the Division of Unemployment Assistance (“DUA”) concerning how to file for unemployment benefits. Download: DUA’s notification pamphlet.

13. Take all appropriate security measures to protect co-workers (if there are safety concerns) and to protect the employer’s business interests (e.g., obtain employee’s laptop, cell phone, keys, pass cards, employer credit cards, terminate access to computer system, prevent the removal of confidential documents and materials).

14. Take appropriate steps to keep confidential matters surrounding the discharge (including any investigation leading up to it). Generally, when the discharge is for misconduct, a strict “need-to-know” rule should be followed to reduce the risk of a defamation claim.

15. As discussed below, in appropriate circumstances, consider presenting the employee with the option of receiving additional termination benefits in exchange for a legal release of all claims the employee may have against the employer.

Our experience in defending hundreds of claims by discharged employees tells us that what is said at the time of termination, and how the termination process is handled by the employer, often determines whether an employee will subsequently file a legal claim. When an employee does file a claim, an employer’s contradictory statements, insensitive conduct or other missteps at the time of termination almost always adversely impact the employer’s defense of the claim and increase its exposure to damages. We believe that taking the steps outlined above will help employers manage employee terminations more effectively and avoid the mistakes that so often lead to employee claims.
Using Separation Agreements to End the Employment Relationship

For many employers, an employee termination triggers an almost knee jerk reaction: offer the employee severance pay and a separation agreement with a release of claims to avoid a potential employee lawsuit. Although there are advantages to the use of separation agreements to prevent prospective legal headaches, such agreements may not be appropriate in all instances. Moreover, a form of separation agreement is often used with little thought regarding whether it is suitable under the circumstances or has been updated. In light of recent legal trends, that form could be found unenforceable by a court, which could result in the former employee getting to keep the severance pay but also having the right to sue the company for employment claims.
Is a Separation Agreement Appropriate?

Whether to offer a terminated employee a severance package in return for a release of claims depends on a number of employer specific factors, such as employer policy, practice and employee relations philosophy. Generally, providing severance in exchange for a release can be a worthwhile investment, as the amount of severance is often insignificant when compared to the cost of defending an employee claim. Severance agreements are particularly useful when the termination is a difficult one or the separated employee is viewed as the type of person likely to assert a claim. Severance agreements are also effective tools to prevent litigation in the context of layoffs, where there are risks of multiple claims.

However, there are sometimes factors that militate against offering severance. For example, out of fear of litigation many employers offer severance to nearly all employees, regardless of the reason for termination, needlessly driving up the overall costs of employee terminations. Offering severance to an employee fired “for cause” may send the wrong message to other employees, i.e., that they will get severance no matter what the infraction.

Further, offering an employee a severance agreement, which by necessity will contain at least some “legalese,” may unintentionally generate claims. When provided with an imposing legal document, a terminated employee may feel compelled to consult an attorney (indeed, the severance agreement may advise the employee to do so). Especially if the severance offered is relatively modest, the offer may do no more than cause the employee to consult counsel and consider asserting claims when he or she might otherwise not have done so.
Special Issues Relating the Older Workers’ Benefit Protection Act

Employers should ensure that any release of age claims under the federal Age Discrimination in Employment Act (“ADEA”) complies with the Older Workers’ Benefit Protection Act (“OWBPA”). A compliant agreement must include the following provisions (among others): (i) a 21 day consideration period; (ii) a 7 day revocation period; and (iii) advice to consult with an attorney prior to executing the agreement. Omitting these and other provisions will mean that the release will not waive age claims under federal law. Moreover, employers should be aware that in situations involving the termination of two or more employees special rules apply to release federal age claims, including additional time for consideration (45 days) and detailed informational disclosures.
Special Issues Relating to Reductions In Force

Reductions in force (“RIFs”), which often involve the termination of substantial numbers of employees, must be planned carefully given the potential cost of defending potential claims from large numbers of employees or a class-action lawsuit. Moreover, employers conducting RIFs must consider the potential impact of laws concerning plant closings, such as the federal Workers Adjustment and Retraining Notification Act (“WARN”) and Massachusetts plant closing law.

Generally, WARN requires employers with 100 or more employees to provide 60 days’ notice prior to a plant closing or before laying off/terminating 50 or more employees. Compliance with WARN can be technical and missteps may subject an employer to substantial penalties, so counsel should be consulted well in advance of any planned RIF. Massachusetts also has a plant closing law that applies to any employer closing a facility that had 50 or more employees during the previous six-month period. Under state law, a “plant closing” is defined as a permanent cessation or reduction of business at a facility that results in the permanent separation of at least 90% of the employees within a 6 month period. Among other things, the law requires reporting to state agencies. If both WARN and Massachusetts law are triggered by the RIF, the employer must comply with both.

Additionally, if a reduction in force is challenged in court, the employer will want to have its selection and decision-making process well-documented so that it can show that layoff decisions were based on legitimate, non-discriminatory considerations. Employers should also consult with counsel to discuss conducting an analysis of the impact of the RIF on protected categories (i.e., age, race, sex, etc.) prior to implementing the layoff.
Conclusion

Handling terminations carefully is always important, but is even more so in an economic downturn due to the increased risk of former employees bringing legal claims. Each situation should be reviewed carefully to ensure that the risk of claims and the potential exposure to liability is minimized. Steps may need to be taken before the termination or layoff is implemented.

Whether it makes sense to offer a terminated employee a severance package in return for a release of claims depends on a number of employer specific factors, such as employer policy, practice and employee relations philosophy. Providing severance in exchange for a release can be a worthwhile investment, as the amount of severance is often insignificant compared to the cost of defending an employee claim. Severance agreements also can be effective tools to prevent litigation in the context of layoffs, where there are risks of multiple claims. Employers should revisit their separation agreements to ensure the agreements will be enforced. Employers should also make sure they are in compliance with the special requirements relating to reductions in force and plant closings.

Reducing Layoffs as Economic Stimulus

President-Elect Obama has proposed that $10 billion of his economic stimulus package be dedicated to expanding and extending Unemployment Insurance to help people who have lost their jobs. Given the fact that the unemployment rate increased from 4.9% to 7.2% last year, this appears to be a good idea. However, I have a suggestion for him - redirect some of those funds to encourage companies not to layoff their employees in the first place! As we all know, companies are laying off employees in alarming numbers to cope with the recession. Aside from the terrible impact layoffs have on those directly affected, they also have insiduous effects on the company and society as a whole:

1) Low morale and reduced productivity - The employees that survive layoffs are typically traumatized by the experience and are constantly watching over their shoulders to make sure they don't go next. A culture of worry permeates the environment and workers spend significant amounts of time discussing the layoffs, what happened to their colleagues who were let go and what the future holds. Consequently, although everyone keeps up the appearance of being busy, productivity takes a big hit. Given the fact that we have a knowledge economy, the impact of the reduced productivity of employees cannot be overstated.

2) Increase in consumer fear - Every time another corporate layoff and the increasing unemployment rate becomes public news, consumers become even more afraid that their company may be next even if their company has announced no such plans. This fear contracts consumer spending even further thereby making the economic crisis worse, thereby increasing the number of companies that feel pressured to layoff employees.

This vicious cycle will continue to perpertuate itself unless companies are given an incentive not to layoff their employees. A few ideas include:

a) Tax breaks for companies who don't take part in layoffs

b) Tax incentives for companies to utilize Flexible Working Arrangements to reduce payroll costs

c) Tax breaks for employees who agree to a reduction in their salaries and benefits
Do you have any other ideas as to how to reduce the layoffs epidemic? Do you know any company being creative about managing payroll costs? I would love to hear from you.

Employers can reduce labor costs without layoffs

n this economic climate, many companies are laying off employees to cut costs and stay open. However, there is an alternative to layoff in the form of a mandatory furlough. A furlough occurs when a company either shuts down for a specific number of days, say one week per month, or reduces its employees' workdays, say from five to four. In either situation, the employees' time off is without pay. This is a viable method for an employer to reduce costs without losing its already trained employees; however, it may affect an employee's exempt status and, consequently, his or her overtime exemption under the Fair Labor Standards Act.

Under the FLSA, exempt employees must be paid the same minimum salary for each week that they perform any work. If the pay cut created by a furlough takes an exempt employee's salary below the minimum required by the FLSA, the employee's exempt status is threatened. The FLSA also prohibits an employer from deducting money from an exempt employee's paycheck during a current pay period based on a reduction in work time. Further, under California law, reducing an exempt employee's schedule in combination with a salary deduction will defeat the overtime exemption.

To maintain an employee's exempt status and implement a furlough, the employer may, of course, simply reduce the employee's salary without reducing the hours worked. Another option is to implement the furlough on the basis of a full week that coordinates with the workweek. Under this system, the employee's exempt status would not be jeopardized because the employee is not entitled to a salary for any week in which he or she performs no work.

If a mandatory furlough is in the offing, the employer must make sure that all affected employees are given advance written notice. We recommend that the notice set forth the changed hours of work as well as the obligations of the employee during the furlough. This would include, for example, whether the use of accrued PTO or vacation time is elective or mandatory and, in the case of exempt employees, notice that absolutely no work may be performed on behalf of the employer during the furlough even insignificant work in the form of e-mail, telephone or other methods of communication.

How to reduce Startup expenses…But NO layoffs please

We’ve earlier reported startups/companies layoff news here and here but as such layoffs have become so frequent now that it’s no more a news but just an obvious reaction to the troubled economy.

As of now, more than 20,000 employees working at tech star

tups/companies have lost their job and this figure may exceed one’s wildest expectations in the coming months.

Seeing the current situation, we decided to put forward a bunch of tips for startup guys & entrepreneurs to avoid “painful layoffs” and still survive this crunch period…

Have a look at this eleven tips !

1. Re-direct surplus/additional human resource

Although startups do not, in general keep surplus staff (for the sake of handling unplanned & overwhelming business opportunities),but if there’s anybody doing nothing relevant to your startup then better give him a break.

Mind you, layoffs are painful only to those who were working hard but still became a victim of situation but those who were good for nothing(such folks themselves know that better) won’t take it as a big blow. You may re-direct those guys to some neighboring startup requiring few part-time folks. Hence this makes such a layoff a bit ‘painless’. The rest 9 tips do not involve layoffs at all.

2. Follow Barter economy

Trade your services rather than just selling them. You may be good at technology but spending big bucks on editorial side at your startup and there may be a startup who’ve some under-utilized editors but have lack of tech support. Hence, trading/exchanging services can help you out in saving from critical expenses. You may try Craigslist for finding such service-trading partners.

3. If possible, have a fund-raise but assuming ‘it’ to be the ‘last chance’

If VCs/Angels are still hopeful enough to help you have a fund-raise, go for it. It better to ‘Survive’ with less authority than to ‘Get exhausted’ with more authority(such authority of no use then !). But assume that no more funds will come your way if you don’t show optimistic response to your investors this time.Remember, a dollar saved is a dollar earned.

4. Turn “full time employees” into ‘Work at home’ or ‘Contract based’

To save out your office space and cutting running costs,this method can prove one of the best ways to avoid layoff. Folks remain connected(you can call them back when things go fine) and still you save crucial bucks as they aren’t full time.

5. Cut out Travel & Marketing expenses

We are talking about survival at this time…not about viral promotion of your service.So, marketing/touring expenses can take a backseat in such a situation

6. Reduce your own salary

Top guys(CEO,CTO,who’re usually the co-founders of a startup) are the ones who are least probable to ditch their own startup in crunch situation.Also, their salary is supposed to be highest as well.A 15-20% reduction in their salary can help saving one or two layoffs.

7.Don’t cut out on folk’s salaries

Offer them work higher than usual(say 2-3 hrs more) for the same salary/perks. As time is money so you get to save time(or money) this way. They would like to work a bit longer rather than going down on their current expenses/lifestyle.

8. Monetize more…

If your startup’s business model is largely based on advertising revenues and that means,you have been maintaining a trade-off between money-visitors then try to monetize higher than usual.

Even a re-organisation of your ad placement may save you a folk’s salary(if you’re bringing respectable viewership).Mind you, ‘one folk saved’ is ‘one folk added’.

9. Evaluate options for unavoidable expenses

You may realise that shifting from ‘fixed cost servers’ to ‘Cloud computing based servers’(such as Amazon EC2) may save you one-third a folk’s salary.Look at VOIP.Its quality has increased significantly and it’s cost-effective as well.Similar options on other unavoidable expenses may save you few hundred dollars every month.

10. Fire your PR folks….they just can’t help you out at this moment

They may be good when you’ve plenty to spend but right now, they are just not required. So, get rid of them if you haven’t already done it.

11. Rent out your office space to some other startup or work on Shared basis

Renting additional office space or sharing office infrastructure can serve as a good idea to save up some money

Job cuts hit 6-month low in April, Illinois mass layoffs also decline

Job-cut announcements by U.S. employers dropped for the third consecutive month in April, falling to the lowest level in six months, according to Chicago outplacement firm Challenger, Gray & Christmas. But the cuts were 47 percent above April 2008.

Layoff tallies also declined in reports submitted to Illinois state government. In April, 12 companies advised the state of plans to eliminate an aggregate 1,532 jobs.

That compares with 22 companies in March that filed notices to cut 2,486 jobs. In April 2008, 12 companies planned to slice 2,849 jobs, according to the Illinois layoff notices. The 60-day advance notices are required of most employers with 75 or more workers.

Job cuts remain at recession levels, but their decline could signal that employers are more confident about business conditions, said John Challenger, chief executive officer of the outplacement firm. "It does look as though we may be past the worst of it," Challenger said.

Glass half empty? Labor Department: Layoffs slow to 539K in April

The pace of layoffs slowed in April when employers cut 539,000 jobs, the fewest in six months. But the unemployment rate climbed to 8.9 percent, the highest since late 1983, as many businesses remain wary of hiring given all the economic uncertainties.

The Labor Department tally released Friday wasn't nearly as deep as the 620,000 job cuts that economists were expecting, and was helped by a burst of government hiring. The rise in the unemployment rate from 8.5 percent in March matched economists' forecasts.

The new report underscored the toll the longest recession since World War II has taken on America's workers and companies. However, the slowdown in layoffs may bolster hopes that the worst of the downturn's hefty job losses are past.

Still, companies will remain cautious in hiring, making it harder for laid-off workers to find new jobs.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 15.8 percent in April, the highest on records dating back to 1994. The total number of unemployed now stands at 13.7 million, up from 13.2 million in March.

Companies also kept a tight rein on workers hours. The average work week in April stayed at 33.2 hours, matching the record low set in March.

Since the recession began in December 2007, the economy has lost a net total of 5.7 million jobs.

As the recession eats into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the storm. Those including holding down workers' hours, and freezing or cutting pay.

Job losses in February and March turned out to be deeper, according to revised figures. Employers cut 681,000 positions in February, 30,000 more than previously reported. They cut 699,000 jobs in March, more than the 663,000 first reported.

The deepest job cuts of the recession — 741,000 came in January. That was the most since the fall of 1949.

Employers last month cut the fewest jobs since 380,000 in October. Nonetheless, the April job losses were widespread.

Construction companies axed 110,000 jobs, down from 135,000 in March. Factories got rid of 149,000 jobs, down form 167,000 the month before. Retailers cut payrolls by nearly 47,000, less than the nearly 64,000 cut in March. And job losses in financial activities dropped by 40,000, down from 43,000 in the previous month.

The slower pace of job losses — along with 72,000 more government jobs — helped to temper the overall payroll reductions in April.

March Mayhem Tally Tops 3,500 After End-of-Month Law Firm Layoffs

Although major law firm layoffs have seemingly slowed down from the blistering pace set during the first 10 days of March, the end-of-month total is still a stunning figure.

Some 3,500 attorneys and staff, and perhaps significantly more, have lost their jobs, and announcements of canceled summer programs, postponed first-year associate start dates and even pay cuts at all levels up to and including partners have lost their initial power to shock. The 3,500 figure for March compares to considerably lower tallies of roughly 2,000 law firm jobs eliminated in February, and 1,500 in January.

After last week's round up, another seven law firms have added well over over 300 layoffs to the total for March: Fried Frank Harris Shriver & Jacobson (41 associates and 58 staff); Gibson Dunn & Crutcher (36 staff); Locke Lord Bissell & Liddell (the firm confirms layoffs of attorneys, counsel and staff, but won't provide totals; Above the Law says about 6 percent of associates are being cut, and the Austin Business Journal reports that same figure); Reed Smith (26 attorneys and 74 staff); Robinson & Cole (11 attorneys and 19 staff); Skadden Arps Slate Meagher & Flom (25 staff layoffs were confirmed, but from what the firm says it appears that a much larger number of staff lawyers and staff may have been laid off); and Stroock & Stroock & Lavan (10 percent of associates).

Because some law firms haven't announced layoffs or haven't provided the number of employees let go, the actual tally of confirmed layoffs for March clearly tops 3,500, although the exact number isn't certain. Lord Locke and Stroock, for example, aren't included in the 3,500 total because they haven't provided layoff numbers, although they have confirmed layoffs, and Skadden apparently may have laid off a much larger group than the 25 staff members confirmed and hence included.

March 2009 Layoff List

Mar. 31: Cardinal Health ( CAH - news - people ) pink-slips 800 workers as part of cost cutting efforts.

Mar. 31: Deere & Co. ( D - news - people ) places 40 Illinois employees on indefinite layoff.

Mar. 30: KLA-Tencor ( KLAC - news - people ) lays off 10% of its workforce which comes to roughly 500 employees.

March 27: Wal-Mart Stores ( WMT - news - people ) closes Ohio facility and lays off 650 workers.

March 26: Agilent Technologies ( A - news - people ) freezes share-buyback program and cuts 2,700 jobs.

March 26: Google ( GOOG - news - people ) institutes second round of layoffs by pink-slipping 200 workers.

March 25: Shaw Industries--a Berkshire Hathaway ( BRK - news - people ) subsidiary--closes two plants, idling 600 workers.

March 25: Constellation Brands ( STZ - news - people ) reduces workforce by 5% (400 workers) following decline in wine sales.

March 25: IBM ( IBM - news - people ) slashes workforce in U.S. by more than 4%, or roughly 5,000 workers.

March 24: Legg Mason ( LM - news - people ) lays off 120 to adjust to its current business needs.

March 24: Synovus Financial ( SNV - news - people ) dismisses 200 employees following a 650-worker layoff in September.

March 24: Cummins ( CMI - news - people ) fires 127 workers when voluntary layoff fails to entice enough to leave.

March 22: Freeport-McMoRan ( FCX - news - people ) pink-slips 50 employees at Denver mine.

March 19: Lam Research ( LRCX - news - people ) pink-slips 375 or 10% of the company’s workforce.

March 17: Caterpillar ( CAT - news - people ) adds another 2,454 layoffs to a growing total, as construction equipment demand continues to be weak.

March 17: A Corning ( GLW - news - people ) subsidiary cuts 200 jobs at North Carolina plant.

March 17: Weyerhaeuser ( WY - news - people ) continues ongoing layoffs and production cuts by closing two lumber mills and firing 307 workers.

March 16: TRW Automotive Holdings ( TRW - news - people ) continues ongoing cuts with 42 salaried employees in Wisconsin and Minnesota.

March 13: Baker Hughes ( BHI - news - people ) pink-slips 1,500 (about 4% of workforce)--this follows a layoff of the same number back in January.

March 13: PPG Industries ( PPG - news - people ) lowers first-quarter expectations and lays off 2,500.

March 13: Sunoco ( SUN - news - people ) fires 750 salaried workers--about a fifth of its workforce.

March 12: Weyerhaeuser ( WY - news - people ) cuts 59 workers at a mill in Oregon.

March 11: AMR ( AMR - news - people ) dismisses 323 flight attendants in response to travel slump.

March 10: Lowe's ( LOW - news - people ) closes lighting and ceiling fan distribution center; fires 82.

March 10: Principal Financial Group ( PFG - news - people ) cuts 60 jobs in its health arm (20 at headquarters).

March 10: Suffering from plummet in building and aerospace sectors, United Technologies ( UTX - news - people ) reduces workforce by 5% (11,600 jobs globally).

March 6: Deere & Co. ( DE - news - people ) fires 325 employees at plants in Iowa on weak construction equipment demand.

March 4: Northrop Grumman ( NOC - news - people ) targets administrative positions in California with 750-worker layoff.

March 4: Heil--a subsidiary of Dover ( DOV - news - people ) that makes waste and recycling trucks--cuts 180 jobs.

March 4: General Dynamics ( GD - news - people ) pink-slips 1,200 as turbulence in the aerospace sector continues.

March 3: U.S. Steel ( X - news - people ) closes two plants in Ontario, affecting 1,500 jobs and sparking frustration in Canadians over "U.S. protectionism."

March 3: FirstEnergy ( FE - news - people ) reduces non-union staff by 4% (335 workers) to reduce costs.

Law Firms Layoff List - April 2009

Here is a smaller list for the month of April. Below are the confirmed layoffs for April. Obviously there are a lot more firms getting rid of staff, but unless I can confirm numbers, only the companies that have published will be displayed. (This is a work in progress post).

Perkins Coie Cuts 12 Associates, 26 Staffers, April 14, 2009
Baker & McKenzie Eliminates 124 Legal and Non-Legal, April 7, 2009
Hogan & Hartson let go 93 Staffers, April 2, 2009
Mayer Brown Cuts 135 Lawyers, Staff Across US, April 2, 2009

Job losses due to world crisis tapering off

MANILA, Philippines—Economic Planning Secretary Ralph Recto has announced that job losses resulting from the global financial crisis were “tapering off.”

In his report at the Cabinet meeting Tuesday morning, he said the business process outsourcing (BPO) sector alone was expected to generate around 500,000 jobs in Mindanao, particularly in South Cotobato, Sultan Kudarat, Sarangai and General Santos City.

“Business process outsourcing is robust and the non-voice services will complement the job generators in the call centers,” Cabinet Secretary Silvestre Bello III quoted Recto as saying in a media briefing.

Bello said the 14,000 workers displaced months ago had been rehired by their respective companies.

He said the second phase of the North Luzon Expressway (NLEx) project for C-5 would also create 100,000 jobs.

So far, he said 75,000 workers had benefited from the government’s Comprehensive Livelihood and Emergency Employment Program.

Sega to lay off 560 employees

The latest bad financial news from the gaming industry comes from Sega. The Japan-based publisher just announced its latest numbers and the results are not good. In fact they are bad enough that the company has announced plans to lay off 560 of its worldwide employees (Sega has about 3,100 employees). The company will record a loss of over $235 million, according to Kotaku.

A few weeks ago, it was reported that Sega's US branch had laid off 30 of its employees (A spokesperson later confirmed there were layoffs but would not confirm specific numbers). The new press release states that in order to save costs, Sega will cut 20 percent off its research and development budget which likely means a number of upcoming games could be canceled.

Life After a Layoff

Reggie Case* doesn't need a regular paycheck to make him feel secure. He's already decided he can survive this recession. But a stable income and benefits were nice while they lasted.Reggie, 42, husband, father of two, and a lifelong construction worker with only a high-school degree, left the comforts of a company job behind in May 2008. Reggie saw his layoff coming. In fact, he even helped his boss decide it was time to let him go. For 16 years Reggie was at the center of a small construction and manufacturing company in a suburb of Cleveland. He managed every aspect of it - from leading construction projects to managing commercial property spaces. "I was deep in the business. I knew all their clients, bankers, everyone," he explains. So it was easy for him to see a shift was underway. "I knew a year in advance," he notes. "It wasn't discussed. But anyone smart enough could see that the business they were getting was getting smaller." He responded at the first sign of trouble. "I always have had something on the side. So I would take on more side work. I was preparing for a transition," he says. When spring 2008 arrived and no big summer construction gigs were on the docket, Reggie gave himself and his close friends, the owners, a chance to make a smart decision."I brought them into my office and said, 'How long are we going to pretend I have something to do?'" he explains. While they were surprised by his honesty, the owners admitted they had fretted for months over when and how to let him go. Reggie departed soon after their candid conversation.

Reggie's side work quickly turned into a business of its own. There are pros and cons, he says, of going solo."Business is tough, but it's there," Reggie says. "A lot of getting a job is just about showing up." Regarding the state of the construction industry, he says, "Big business will not be there, like it was, because no one is spending on big construction." He's developed an optimistic response to losing his seat on the gravy train. "I call myself the 'King of the Bottom Feeders.' The only way to make money is to be out there, using word of mouth and taking the little [jobs]," he says. Reggie will take nearly any job -- any time, any size. He makes money from the small projects most construction managers won't consider.But all this hustle carries a cost. Besides not knowing where the next check is coming from, making himself constantly available requires stamina. "Instead of getting home at 5 p.m. and turning the phone off, it's on all evening. And if you need to look at a job on a weekend or evening, you fit it in. You get it done," Reggie says. Why not get a new gig with a different company? Reggie is hooked on his new favorite perks: more family time and the freedom to set his own schedule."I love that I can be with my family more," he says. "Time with your family? That's time you can't get back. Having that handed to me at such a young age is getting a raise."Plus, his day is his own. "I decide where I go and what I can do. I don't have the guilt of the bosses or the company when something else comes up during the day," he says.His family, meanwhile, has been very supportive. Reggie says, "My wife? To say she's been great would be an understatement. She's always felt I was someone who needed to be on his own. There was a relief for her, I think."Reflecting on his bold decision to approach his former employer about laying him off, he says, "I wasn't giving up anything, because there wasn't going to be anything there next May."When asked if he was angry about losing his job, Reggie quickly responds, "That's business. You do that sort of thing in business." While he admits the situation initially irked him, he's moved on. In fact, he ended things so well at his old company, his former bosses now send him business.Reggie offers this advice to all who have recently lost their jobs: "They have to realize that the money that they made and the job that they had is going to be dramatically different for the rest of their lives. You're going to have to get creative to make money. This isn't going to change soon, either."*The source's name has been changed for privacy purposes.

Layoff Tracker

March's tally of job cuts -- 663,000 -- was slightly higher than expected, as the total number of out-of-workers (13.2 million) brought the unemployment rate to 8.5 percent, a level not seen since 1983. That figure has climbed 1.8 percent since November, and 3.6 points since analysts say the recession began in December 2007. As has been the case in recent months, layoffs have affected just about every industry -- only healthcare and education managed to add workers in March. In all, the recessional economy has lost 5.1 million jobs, thanks in part to a restatement (upwards, of course) of January's totals to 741,000.

In Taiwan, unpaid leave instead of layoffs carries its own cost

Reporting from Hsinchu, Taiwan -- As California and the rest of the nation stagger from massive layoffs and soaring unemployment, companies in Taiwan have largely opted to cut pay and work hours to deal with the economic crisis.

Here in Hsinchu Science Park, modeled after California's Silicon Valley, about 100,000 of its 130,000 workers are taking up to 10 days of unpaid leave a month.

Part of the reason is pressure from Taiwan's government, they say. Another may be the cost: Taiwanese laws require companies to pay severance of one month's salary for every year of service. There's also a cultural factor.

"The Western way is just too brutal," said Chang Chia-yua, 28, an engineer who supervises production for a computer memory maker in Hsinchu.

In the U.S., corporations have generally balked at across-the-board pay cuts and leaves as an antidote to a business downturn. As companies eliminate jobs at a furious pace, some managers see layoffs as an opportunity to prune their staffs and keep the strongest performers.

Their logic: "You reduce wages and you might piss everybody off, whereas if you dump some of them on the street, they're gone and you don't have to worry about them," said Jim Klein, an adjunct economics professor at Savannah Technical College in Georgia who has three decades of industrial relations and corporate experience in Taiwan.

Sharing the pain with everyone may not be the most efficient approach, people here concede, but at least everybody has a job. It gives some security to workers and also has helped curb the island's unemployment rate, which hit 5.3% in January, up 1.5 percentage points from a year ago. California's jobless figure rose almost as much in a single month, spiraling to 10.1% in January. (The U.S. rate was 8.1% in February.)

But as Chang and others in Hsinchu are finding out, the Taiwanese way can be pretty cruel too -- and may in the end prove no better than layoffs for some people.

When his company started to get walloped by the global financial crisis in November, Chang and his colleagues were told to take three or four days off without pay that month. Chang didn't mind so much at first; the single engineer used the time to volunteer at a nearby hospital, greeting and helping patients and their families with their questions.

But then, as business fell further this year, Chang's employer, whom he was reluctant to identify, told workers to take eight or nine days off a month. In February, that sliced a third of Chang's $1,325 monthly salary. Worse, he and others fear that eventually there will be layoffs.

"The atmosphere in the company is pretty nervous these days," he said. "After all, we have been having unpaid leave for so long."

So fearful are some workers that they're going into the offices on their stay-at-home days to impress bosses in the hope of keeping their names off any existing or future layoff list.

"It sucks," said a 40-year-old engineer for a flat-panel screen manufacturer, who would only give his last name, Tsai, because he didn't want to draw any attention and increase the risk of losing his job.

Tsai was sitting in a dimly lit Starbucks on a rainy February afternoon at Hsinchu's leafy campus, commiserating with a fellow engineer who was also on unpaid leave. Both men said their bonuses had been eliminated and that they were currently required to take one day off a week.

Tsai's rest day was Friday, but he didn't take a long weekend trip with his wife and two children. "We don't go shopping anymore. We eat at home." In fact, he went to work that day.

"I just show up and try to tell the boss I'm still working," he said with a wry smile. "I don't know what else I can do."

In recent months, distraught workers from Hsinchu and elsewhere have massed in the capital city, Taipei, to complain about their shrinking paychecks as employers add more days of unpaid leave. In one demonstration, workers hoisted rice bowls and banners saying, "No Work, No Pay," and demanded that the government stop employers from forcing workers to take leaves and cutting workers' pay below the national monthly minimum wage of about $500.

So far this year, the 430 companies at Hsinchu Science Park have largely held the line on mass layoffs, said Tu Chi-hsiang, deputy director-general of Hsinchu park, which is run by the Taiwanese government.

For all of last year, he said, about 4,400 people lost their jobs, mostly in the fourth quarter. Most of them were temporary employees and contracted foreign workers, mainly from the Philippines.

Overall, the figure pales next to job cuts announced recently by companies in California's Silicon Valley: 24,000 at Hewlett-Packard; up to 6,000 at Intel; 5,000 to 6,000 at Sun Microsystems; 1,500 to 2,000 at Cisco Systems; and more than 1,000 each at Yahoo and eBay.

"The U.S. is more efficient in operations," said Scott Huang, an associate researcher at Hsinchu's administration. "We pay more attention to tradition."

As in Japan and South Korea, larger Taiwanese companies tend to be more paternal, and workers still cling to Confucian values of loyalty and identify with their employer.

Huang says many workers are making good use of their unpaid leave. Some are taking training courses in management subsidized by the government. One large group of engineers and technicians, he says, formed a cycling club, riding up the hills in nearby Fei-feng Mountain on their days off.

Hsinchu itself evokes images of Silicon Valley, with its tree-lined streets, low-rise buildings and dorm-style apartments. The science park, about 45 miles southwest of Taipei, is dominated by manufacturers of semiconductors, computers and peripherals -- Taiwan's mainstay exports, which have been clobbered by the global economic downturn.

Siliconware Precision Industries, one of Hsinchu's largest companies with 15,000 workers, shows just how fast and hard sales have fallen. Siliconware supports semiconductor companies, assembling and testing wafers.

"Prior to the fourth quarter [of 2008], we were doing very well," said Janet Chen, investor relations director. Then the bottom fell out: Revenue plunged more than 50% in January from the previous year. Sales were off 35% last month.

Siliconware began by cutting expenses, including phone bills, travel and entertainment. Salaries were slashed 10% to 15%. About 200 mostly temporary workers were let go, Chen said. Then, most everybody else was told to take four to six days of unpaid leave a month.

"Management doesn't want to cut jobs right away," Chen said. "It's very sensitive. . . . The government may say something."

Taiwanese officials worry about social unrest and other destabilizing effects of mass layoffs, including further erosion in consumer spending, exacerbating the pain and deepening the recession.

One weapon the government uses to press its case with employers is the threat of restricting future entry of foreign workers, says Wu Yu-jen, an associate professor of labor relations at National Chung Cheng University in Taiwan's Chia-yi County.

Wu says Taiwanese companies had recruited about 380,000 foreign workers, predominantly from Southeast Asia, to work in factory and other jobs that were previously hard to fill. Thousands of them have been let go in recent months, but when the economy improves, employers will need government approvals to bulk up again.

"The government can freeze the number of foreign workers if they don't listen," Wu said. On the positive side, he said, Taiwan has been giving training subsidies for each worker on leave.

Wu and other analysts say it's too early to tell how long Taiwan's no-layoff stand will last.

In the short term, it could be cheaper to put people on leave than pay severance for layoffs. And if business rebounds soon, companies will be positioned to ramp up production quickly by adding hours.

But if the unpaid leaves drag on, that could demoralize the staff and add to the financial hardship for employees and the company.

"It really comes down to your best-guess estimate: How long is this going to last?" said Klein, the Georgia economics professor and consultant to businesses in Taiwan. "It's tough, tough, tough," he added, because the outlook is so foggy.

"There's no visibility," he said. "You've got to make a gamble in this environment."

Cao Jun in The Times' Shanghai bureau contributed to this report.

One layoff leads to another

When customers sit beneath an intricate gold mural, order kung pao chicken and confide that they've just lost their jobs, waitress Alice Lau understands their hurt and fear. She's feeling the pinch too, as the repercussions of decisions made by others trickle down to her.

Her hours at the Great Wall Chinese restaurant have been cut because regulars such as Rogelio Valdez can no longer afford dinners out. Some customers come in for one last meal to tell her they've been laid off, then disappear.

Valdez, a barber, said business at his shop was down. He no longer sees customers such as Dave Vasquez, who shaved his head to avoid spending money on haircuts.

Vasquez had worked as a nanny for Bill Maxwell. But when Maxwell lost his job with a Pasadena video game company, he was forced to let Vasquez go. The start-up had no money to pay its workers after a major publisher, spooked by signs that the country's economic troubles were worsening, canceled a contract in August.

As the recession deepens across the country, touching millions of individuals, it links people through countless cutbacks and layoffs. One job loss leads to another, much the way a wobbly domino can topple the whole row.

Minor financial decisions -- a penny pinched here, a dollar saved there -- build, rippling through a chain of strangers.

::

The loft in Pasadena's antiques district was funky, with Victorian chandeliers, exposed brick and a bathroom plastered with turquoise tiles. It seemed the perfect space for the video game start-up, WhiteMoon Dreams.

Founders Scott Campbell, 36, and Jay Koottarappallil, 32, moved out of their home offices and into the rented loft in August 2007. Soon after, a major video game publisher agreed to buy the shoot-'em-up game they were developing. The pair hired a dozen people and a handful of contractors. Everything seemed to be coming together.

Then the stock market started its free fall. Publishers grew skittish about spending money. The founders could see calamity coming, like someone anticipating the breakup of a relationship but powerless to do anything about it.

Last summer, a year after agreeing to the sale, they were crushed when the publisher, which they would not name for legal reasons, said it could no longer buy the game and brought in lawyers to unwind the deal.

But the founders didn't want to give up. They told employees they could stay -- if they didn't mind working for free. Six remained and have picked up a little work, but nothing yet that could revive the company's fortunes.

The stress is accumulating as WhiteMoon Dreams prepares to show off the game -- appropriately named Salvation -- at the Game Developers Conference this month. The founders hope to find a buyer for the project or a publisher that will hire the company to write something new.

Campbell and Koottarappallil feel the pressure of coming to work every day and not knowing whether it will be the last, of depending on family and friends and the unemployment office for money to survive, of watching yet another rent deadline or mortgage payment approach, of wondering who among them might decide to call it quits.

"Everything's on hold," Campbell said. "It's a waiting pattern to see how everything shakes out."

They set a Dec. 31 deadline to shut down the company but couldn't pull the trigger. They sit, work and wait. But some of their employees and contractors couldn't do the same.

Bill Maxwell, a writer who created plots and dialogue for the game, had a family to support and needed a salary. His initial contract ran out in June with an understanding he'd start another job for WhiteMoon Dreams in November.

But when the publisher backed out of the video game deal, the company couldn't afford to hire him again. Without any work on the horizon, Maxwell had to make some changes of his own.

Maxwell and his wife, Nikki, can rattle off a long list of things they've done without since he stopped working for WhiteMoon Dreams.

Their kids, ages 9, 6 and 3, are familiar with them too: No more sushi, lattes or Whole Foods groceries. No trips to Disneyland, indoor playgrounds or bowling alleys. No new books or DVDs. No fixing the tub in their second bathroom. No healthcare.

Bill, 41, spends hours sitting in the study of the family's one-story home in North Hills, searching Craigslist for jobs as leafy trees gently tap on the windows. A child's drawing taped to the bookshelf says, in shaky writing, "I am thankful for my dad."

Nikki, 39, was laid off from a job writing grants at a charter school last fall. When money grew tight, she surrendered to friends' counsel and picked up staples at a food bank in the Valley, although she was more used to donating and volunteering there. She choked up when, in addition to rice, beans and canned vegetables, she was given a sheet cake to share with her children.

Grief and anger have swamped the Maxwells at times, causing them to wonder whether things will ever change. How long can you look for a job without losing hope?

It's been tough, they say, being consigned to their cluttered home. They have spent days in sweat pants, stepping over crayons, guitars and piles of toys, and having to say no when their son asks for a Popsicle because there's just not enough money for treats.

"We had to make some hard choices," Nikki said, tucking a yoga mat into a wicker basket and glancing outside at a child's bike abandoned in the middle of the yard. "The bottom line is, I still have to feed my family."

That meant adding one more thing to the do-without list: their good friend and live-in nanny of six years, Dave Vasquez.

On a warm day in January, Vasquez peered in the mirror and saw a carless, cashless vagabond looking back at him. His eyes were bleary from nights of tossing and turning on couches, his skin sallow from eating TV dinners. His hair was scraggly and needed a cut.

Life changed dramatically after the Maxwells laid him off in August. Vasquez began a routine of couch surfing and job hunting, living off food stamps, taking buses around Northridge to look for work, hoping employers wouldn't mind that he had been arrested once years ago -- for stealing a loaf of bread.

Days meant heading to the employment office or scavenging for cigarette butts that, when combined, might contain enough tobacco for a smoke. Nights, he waited for darkness so he could retreat into the reprieve found only in sleep.

"You just do what you have to do to make sure tomorrow comes," Vasquez said.

Worst were the days spent in offices waiting for food stamps. He couldn't help thinking that he didn't belong, that he was different from the people there.

Each week, more people seemed to show up at the employment office looking for work, and the 36-year-old Vasquez wondered how he could compete. His scattered resume listed jobs at comic-book shops and in construction, as a cooking instructor and a record-store clerk.

So when Vasquez stared in the mirror on that January day, five months after being laid off, he knew he needed to look more professional. He glanced in his wallet and saw that he didn't have enough cash for a cut from one of the barbers he had frequented in the Valley.

Vasquez then picked up a 10-year-old pair of clippers, pulled off the plastic guards and shaved his head.

Proof of the sputtering economy has crept close to Rogelio Valdez's storefront on Reseda's Tampa Avenue. His neighbors' windows are covered with filthy "now leasing" signs. On the median, posters announce blowout sales at fabric stores and mattress warehouses.

Inside, Valdez's old-fashioned barbershop looks immune to the passage of time. From two framed paintings, Marilyn Monroe winks at the men sitting in red leather barber chairs so old they have built-in ashtrays. The red, white and blue barber pole rotating outside matches the tinfoil American flags that flutter above the door.

But not even a business offering $12 haircuts is spared the fallout when people such as Vasquez decide to scrimp. Things began to slow in January, Valdez said, and supply costs kept climbing: shampoo and scissors, hair spray and after-shave, trimmers and razor blades. So far this year, business is down 20%.

"The whole world's cutting back," he said.

Valdez, 64, now works longer hours -- seven days a week from 9 a.m. to 6:30 p.m., except Sundays, when he closes a little early to visit family in the Valley.

It's just bad timing, he said, that things started to slow seven months after he and his wife took over Medina's Barbershop from its previous owner, who had retired.

Valdez has been a barber for 40 years. Now he's working for himself, just as he had hoped to do as a young boy in Jalisco, Mexico. He decided then to enter the trade because he was told he could cut hair his whole life, even as an old man. He's glad that he's able to work extra hours to keep his doors open.

Not that it won't take some sacrifices, Valdez said as he brushed hair from a customer's shoulders. No more vacations to Las Vegas. No more unnecessary long car rides when the price of gasoline seems as unpredictable as the traffic patterns on the commute from his home in South-Central Los Angeles. No more dinners out at his favorite restaurant, the Great Wall, a few blocks away.

During the lunch rush, business at the Chinese restaurant is sluggish. Bowls of fried won tons line the counter, uneaten. Blue-and-white dishes are set atop empty tables as if waiting for a party to begin.

When people such as Valdez stopped coming in for meals, Great Wall owner Wilson Chien was determined not to fire any of his 11 staffers. He instead reduced each employee's hours by one day a week.

For Alice Lau, the $600-a-month pay cut means more years of pouring tea and delivering steaming plates of food.

"I'm getting older, I wanted to retire, but my investments went down a lot," she said, her short hair showing barely a trace of gray against her uniform of white tuxedo shirt and black bow tie.

Lau, 51, has seen hard times before. She emigrated from Hong Kong at 18 with a fifth-grade education and earned a living sewing in backrooms of tailor shops. She divorced and raised her three children alone. The Chinese restaurant she bought tumbled to the ground during the 1994 Northridge quake as if it were made of twigs.

Her kids are grown now. But one son is a student and her daughter works at a movie theater, so they still live at home, and Lau pays their insurance and cellphone bills. They try to help her with their salaries whenever they can.

"We're just hanging on," she said.

She's lucky though, Lau says as she shuffles between tables, placing a bowl of noodles here, a plate of fried pineapple balls there. She has good kids who "came up well" and a job she loves.

Still, Lau has had to make changes to make ends meet. She eats dumplings at home instead of dim sum in Alhambra. She blow-dries her hair rather than make weekly visits to Kim's Upper Cut, the salon next door. Her son does the yardwork at their West Hills home; Lau decided she could no longer afford the gardener who came weekly.

The gardener and the hairdresser surely pared their budgets too, adapting to the slowing economy. The ripple effect continues, although those affected may not know how they were swept up in it or where it might end.

L.A. Unified board OKs layoff notices to about 9,000 employees

The Los Angeles Board of Education approved issuing preliminary layoff notices to about 9,000 employees Tuesday despite a large demonstration by the teachers union and some board members' concerns over potential harm to educational quality.

In separate votes, the board approved sending letters to about 2,000 permanent elementary school teachers and about 3,500 probationary teachers informing them that they are in danger of losing their jobs.

The rest of the notices are going to non-teaching personnel, including counselors and administrators.

Before layoffs could occur in the nation's second-largest school system, the board would have to approve the terminations in June.

Board member Julie Korenstein voted against both measures, and Richard Vladovic voted against one and recused himself in the other. Marguerite Poindexter Lamotte also abstained from a vote.

Because of the state and national fiscal crises, the district is facing a nearly $700-million shortfall over the next 18 months.

District officials said they hope to avoid laying off all of the employees who will be given notice.

But Supt. Ramon C. Cortines cautioned that the district's deficit might grow. "If the revenue continues to be in the tank, we believe we will take another hit," he said.

Some board members said they were concerned that layoffs would harm the quality of student educations.

"You can't have a reduction in force of this magnitude and meet everyone's needs," Marlene Canter said.

Teachers union officials warned before the meeting that their members would perform an act of civil disobedience that could result in arrests. After protesting outside the board room, union President A.J. Duffy interrupted the meeting by speaking out of turn when it began.

"You know I'm not leaving the rostrum," he said as board President Monica Garcia admonished him.

"You are out of order," she said.

Union members, wearing red, sat in a semicircle around Duffy as the school board moved its meeting to a side room. Union members shouted "Shame on you!" and Korenstein, a strong union supporter, faced the crowd and put a hand over her heart before leaving the board room.

School district police ordered the group to disperse or face arrest. About 50 district employees who had been pre-screened by union officials remained behind, but police did not detain anyone.

The group remained in the board room, giving interviews to news media and discussing their concerns about larger class sizes and their students' education.

"This country we love was born out of civil disobedience," Duffy told the crowd.

The group left after nearly three hours to join another protest outside the building.

"We'll be back here to stop the cuts!" they shouted.

Writers Guild to cut workers amid shortfall

Confronted with a growing budget deficit, the Writers Guild of America, West plans to cut about 20 positions by the end of the month.

The guild, which has about 185 employees, notified worker representatives last week that layoffs, which could begin this week, were needed to plug a budget hole of more than $2 million, said two people familiar with the matter. The union, which has 8,000 members, has annual operating expenses of about $25 million.

David Young, the union's executive director, recently told the guild's board that he was considering job cuts to close a budget shortfall, which guild officials have largely blamed on investment losses caused by the stock market decline and a sharp falloff in jobs and work for writers during the last year.

A guild representative declined to comment.

The layoffs can be directly tied to the tough times for Hollywood writers.

As scripted shows went dark during the 100-day writers strike last year, television networks beefed up production of reality programs -- which typically don't use union writers -- to fill the airwaves. That continued after the strike ended in February, creating fewer opportunities for writers. Some scripted shows didn't come back, while others returned with fewer episodes.

Writers also found it harder to command the same fees as they had in the past for work on network shows, which have been losing viewers to the Internet. More recently, the slowdown in work has been exacerbated by networks' ordering fewer pilots for new series.

All of which has meant less money rolling into the guild's coffers. The WGA's income depends on how much its members earn. Guild members, as part of their union dues, are required to contribute 1.5% of their earnings each quarter.

Also contributing to the budget shortfall, people familiar with the union's finances say, is the guild's ongoing campaign to organize writers in the reality TV sector who work behind the scenes crafting dialogue for programs. The guild spent about $400,000 on the drive last year, a person familiar with the situation said.

Some of the 20 positions could be eliminated through attrition, resulting in fewer layoffs. Affected employees will receive severance packages and a guarantee that they will be rehired if the union's finances improve.

SAP layoffs

SAP appears to be executing its layoff plan this week, which it announced back in January. In an open letter then to employees, SAP co-CEOs Henning Kagermann and Leo Apotheker announced that the workforce reduction would impact 3000 employees, or 5.8% of SAP's workforce.

Although a small number of SAP folks were let go in January, the remaining number appear to coming in waves, one of which is occuring this week. I first noticed an increasing number of hits to the Spectator from Google, under keywords "SAP layoffs" earlier this week. The only confirmation seems to be coming from Twitter.

At a minimum, based on Twitter status updates, layoffs appear to be taking place in Palo Alto yesterday and today. There also appear to be some layoffs that took place in Israel last week, and in Australia the week before.

20 Ways to Preventing Layoffs

1. Do the right thing all the time. This means making the tough decisions not to hire in the first place or replace less productive positions. Use attrition to make the necessary cuts. Make the tough decisions now rather than later. It just gets more complicated with time.

2. Hire well. It has been difficult in recent years to find good people. But sometimes it’s better to have a position vacant than to hire poorly…especially in management. One bad manager can take down ten’s to thousand’s with them.

3. Stay on a low fat diet. Exercise and keep your company fit by continuous improvement. Productivity is the intermediate measure of health and if it’s not always going up, you are becoming less competitive.

4. Use your resources wisely. I call this CEO or Cost-Effective Organization thinking. Manage your financial, time, people, space, knowledge, energy, and material resources well.

5. Read the tea leaves. Use both the pessimistic and optimistic views of the economy to shape your business decisions. Some of you companies are so large you have your own economists and we all have the Federal Reserve and others. Listen to them (with a grain of salt) and test the party line against reality and the predictions.

6. Partner. Partnerships and joint ventures can allow you to leverage your core resources and push the variability to others or reduce it.

7. Have everyone in the company on the team. Use methods such as the Profit Improvement Process to give everyone some level of influence over and responsibility for profits. It sure beats the adversarial approach.

8. Stop being selfish. Make decisions for the greater good of the corporation instead of the insular betterment of top management. Your people just may be more important than your bonus.

9. Beware the siren song of “across-the-board.” You may find that your company has a 10% disadvantage in the market but a 10% across-the-board cut is guaranteed to take out muscle as well as fat. Adjust your business unit by unit.

10. Listen to the pessimists. Those naysayers you are tempted to quash have something important to say. Listen but then take positive action on that negative view.

11. Prepare your contingency plans. You are much better off to have a plan to review if something bad happens than to have to invent something in the heat of a crisis.

12. Use overtime. Covering peaks in business with overtime allows you to scale back without layoffs when things slow down.

13. Manage your inventory. If you have missed the economic tea leaves, your next indicator may very well be your inventory or backlog. Anticipating a slow-down can mediate the impact.

14. Don’t expect to placate stock analysts with a mass layoff. There is unlikely to be a long-term positive impact on stock price just because you announce a cutback. It may be a cop out.

15. Invest in new products. New products are the only prevention for premature obsolescence. If you don’t develop internally, partner with those who do or buy new products. You must know where your products are in their lifecycles and plan accordingly.

16. Invest in new processes and technologies. Keeping up with the Joneses is vital. Just make sure you pick the right benchmarks to emulate. Watch out for fads! For at least some period of the 1990’s mass layoffs were a fad.

17. Watch your expansion. Expansion is fun but excitement can create a fog that hides the pitfalls of rapid growth. This is especially true when capital dries up in the middle of a growth spurt. Build revenues based on contribution margin and profitability not the top line.

18. Check your egos at the door. Be a team player. Use your drive for success in a positive way rather than just for self-aggrandizement. The failure to look out for others has taken many entrepreneurs and managers down along with their employees.

19. Stop shuffling the deck chairs on the Titanic. If a business unit isn’t achieving its goals, it is unlikely to get better if you just shuffle the staff around. Find the fundamental problems and fix them. Start with the top people. They set the tone.

20. If you have to make layoffs, do them the right way. Communicate, communicate, communicate, and get everyone involved. Have a clear and fair policy on what people are going to get. Take care of both the people being laid off and the survivors. Everyone will have pain and, hopefully, healing to experience. Help them. If you’ve run your company well to this point, they should understand that you have done everything you could to avoid this outcome. This will help you avoid future, bigger layoffs.

It’s not easy to be a manager or entrepreneur today. It never has been and it takes more than twenty tips to succeed. We always carry a responsibility for the people who work for us. This is our highest calling.