Worst of U.S. Job Cuts May Be Over as Companies Freeze Pay, Survey Shows

> Worst of U.S. Payroll Reductions May Be Over, Survey Shows
>
> Feb. 25 (Bloomberg) -- More U.S. companies are adopting pay and
> hiring freezes to lower their labor costs during what is likely to
> be a prolonged recession rather than depending on further payroll
> reductions, a private survey found.
>
> The share of companies planning staff cuts fell to 13 percent this
> month from 23 percent in December, according to figures issued today
> by Watson Wyatt Worldwide Inc., an Arlington, Virginia-based
> workforce consulting firm. Fifty-two percent of the 245 employers
> surveyed have already made staff reductions, up from 39 percent two
> months earlier.
>
> "With over half of companies reporting that they have already made
> layoffs, they are now focusing on smaller, more sustainable cost-
> cutting actions," Laura Sejen, global director of strategic rewards
> for Watson Wyatt, said in a statement. "Companies have come to terms
> with the fact that this recession is going to last and that they
> can't slash their way out of it."
>
> The economy has already lost 3.6 million jobs since the economic
> slump started in December 2007, the biggest decline since World War
> II. Economists surveyed by Bloomberg News this month forecast the
> jobless rate will climb to a 26-year high of 8.8 percent by the end
> of 2009.
>
> Fifty-six percent of the companies surveyed have put in place a
> hiring freeze, up from 47 percent in a December survey, according to
> Watson Wyatt. Salary freezes have been implemented by 42 percent of
> respondents, up from 13 percent, and 68 percent of firms have
> enacted travel restrictions, up from 48 percent.
>
> Twelve percent of companies have reduced contributions to employee
> retirement plans, compared with 3 percent in December, and 13
> percent cut hours, up from 2 percent. The survey had a margin of
> error of plus or minus 6.2 percentage points.