November/December 1995 Issue

The Axmen Cometh

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Corporate America describes “downsizing” as a bitter pill we must swallow–massive layoffs and all–to make business lean, mean, and globally competitive. At the helm is a new breed of chief executive, hired just to fire employees by the thousands. But does downsizing extend up the ladder? See what you think.

Downsizer: George Fisher

Company: Eastman Kodak

Number of jobs cut: 14,100 (1993-94)

Company line: “This company is interested in profits, returns, and improved margins…the necessary increases in productivity will require painful measures.”

CEO pay before cuts: $1,890,000

CEO’s new pay: $3,901,000

CEO comment: “Rather than simply take an ax to budgets and manpower, we are trying to change, in significant ways, how this company operates.I It’s not going to be business as usual. There is a new Kodak, and it is moving swiftly to achieve profitable growth.”

Downsizer: Michael H. Jordan

Company: Westinghouse Electric

Number of jobs cut: 4,900 (1994-95)

Company line: “We are taking actions to improve our operating performance, accelerate the divestiture of noncore businesses, rebuild our equity base, and improve financial flexibility.”

CEO pay before cuts: $713,400

CEO’s new pay: $1,357,000

CEO comment: “It’s not just today’s purge or tomorrow’s purge. Each business has to continually redefine itself to be competitive, more competitive on a go-forward basis. “So people want to know, when is this going to stop? The answer is: never.”

Downsizer: Albert J. Dunlap

Company: Scott Paper

Number of jobs cut: 10,500 (1994)

Company line: “To swiftly transform the culture at Scott, the world’s largest tissue manufacturer, to a fast-moving, low-cost, customer-oriented producer of quality tissue products.”

CEO pay before cuts: $618,000

CEO’s new pay: $3,575,500

CEO comment: “I believe that through this program, we will strongly position Scott as a decisive, results-oriented business focused on serving our customers while pursuing our number one priority: increasing shareholder value.”

Downsizer: Louis Gerstner

Company: IBM

Number of jobs cut: 36,000 (1994)

Company line: “To streamline the company…the restructuring changes will cover reductions in IBM’s worldwide workforce, manufacturing capacity, office space, and related expenses.”

CEO pay before cuts: $2,800,000

CEO’s new pay: $4,600,000

CEO comment: “It’s too easy to talk only of numbers and head count and restructuring changes and to forget the impact on people. Those who left IBM made substantial contributions when they were here, for which we are all grateful.”

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WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We can’t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

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