Besides layoffs, how else might the design department respond to a decline in demand?
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Answer:
A "layoff" is an action by an employer to terminate employees for lack of work. The term connotes that the termination is temporary—but it may well become permanent. A "downsizing" simply means releasing employees because the operation no longer needs them; reorganization or restructuring of the institution has eliminated jobs. The euphemistic "right-sizing" is sometimes substituted—to flatter management, one assumes. An "RIF," which stands for "reduction in force," is an old and rather straightforward term, its most likely source being governmental and military changes in employment: both actually take place from time to time. The newest addition to this lugubrious terminology (at least from the employees' point of view) is "outsourcing" or "off-shoring," meaning that the work is being transferred to another organization either domestically or overseas.
The layoff is a necessary corollary to seasonal or intermittent employment common in some industries, for example in construction, where building activity typically slows or stops in the winter months and resumes in spring. Industries that manufacture goods sold for winter use often have high levels of production (including lots of overtime) in the summer. The inverse of that takes place when spring and summer goods are made in winter. Industries highly linked with the tourist season typically have layoffs. People employed in these types of activities adapt to the layoffs by having alternative forms of employment in the "off-season." Layoffs also take place in times of economic down-turn because overall demand declines. Producers will cut back from three shifts to two or one or release some employees even when only operating one shift. But economy-driven layoffs are not permanent, and workers are "called back" when things pick up again. Based on statistics collected by the U.S. Department of Labor (DOL), extended mass layoffs have affected on average 1.3 million employees in the period 1996 through 2003—at higher rates during the recessionary period that began in 2000, at lower levels in the booming 1990s.
The laid-off worker has no guarantee of being called back to work; similarly, the employer may not be able to hire back labor if contracts don't renew or the business does not pick up. In the last decade or so the layoff itself has become a euphemism for force reduction. It is a telling sign of the times that DOL began collecting data on layoffs in April 1995 for the first time and has since published such data monthly. Even more revealing is the fact that DOL later added categories such as layoffs due to "overseas relocation" and "import competition"—the last category indicating jobs lost because work in-house has been replaced by imports. All this suggests that the term "layoff" shades imperceptively into the "downsizing" category.
Downsizing typically has multiple causes of which one may well be increased productivity. According to the DOL productivity in manufacturing (output per hour) increased on average 4.4 percent a year from 1995 to 2005 and 2.3 percent a year in business as a whole. If demand for goods and services is steady, this means that each year fewer workers are needed to supply the economy. The second factor behind downsizing is declining revenue due either to a poor economy or increased foreign competition. Finally, if labor is available at lower costs overseas and the work can be transferred, business will relocate jobs to reduce costs.
The stream of business news over at least the 1990s and the mid-2000s seems to suggest that these factors are very much present, indeed that corporate well-being and layoffs are inversely proportional—as a sampling of headlines shows: Compaq Stock Rises 8% on Sales and Job Forecast (The New York Times, October 9, 1992; the article cites the elimination of 1,000 jobs); Stock Rises on News of Possible, Bigger Layoffs (Annex News Watch, September 29, 2004, regarding EDS); and Ford Slashes Jobs, Stocks Rise (CBS News, January 24, 2006). Many more stories carry the same message in the body—if not in the headline. To be sure, stocks rise on any news that a company—especially a troubled company—is cutting costs. Notable in the present context is that so many companies shed jobs as a way of cutting costs