careers.usatoday.com
08/31/2001 - Updated 04:42 PM ET
Overtime is over, cost-cutting companies declare
By Stephanie Armour, USA TODAY
It's not just the unemployed who are looking for work. The economic downturn
means many firms are slashing overtime and work hours, leaving more employees
facing dwindling paychecks.
Some are finding their work hours reduced, while others are toiling in part-time jobs
when they'd rather work full time. Many companies are cutting back:
• Verizon is reducing the amount of overtime hours worked as part of a broader
effort to cut costs through attrition and by limiting use of contractors. The company
expects to save $2 billion a year by the end of 2003.
"Most employees realize overtime is not something you should count on," says
Verizon spokesman Peter Thonis. "It is, by definition, something that is not planned.
The slowing of demand makes overtime less necessary."
• Ford Motor is cutting back on overtime and shift work along with other
cost-cutting measures, such as a slowdown in hiring, voluntary separations and a
reduction in the overall capacity of some plants.
"We have cut overtime at our plants from last year quite dramatically," says Anne
Marie Gattari, corporate news manager.
• At Visteon, overtime this year is down 70% as the auto parts supplier looks to cut
costs. The company also had cut travel and scrutinized discretionary spending.
• At San Francisco-based law firm Brobeck Phleger & Harrison, partners and
associates can opt to work only a few days a week, or they can take up to 12
weeks of unpaid leave. Both programs are voluntary. Earlier, the firm sought to
reduce costs by reducing overtime.
"We're blessed with talent," says firm spokesman Allan Whitescarver. "These
programs reduce our short-term costs but keep our talent long term."
To be sure, some employees prefer the shortened workweeks or reduction in
overtime.
"It's a way to cut costs, and it fosters loyalty among associates," says Kristi
Schutjer, 33, at Brobeck. She is taking time off to travel to Italy after her October
wedding. "It will basically be a honeymoon."
But it's still a financial loss for an increasing number of employees getting smaller
paychecks.
Nearly 40% of companies plan to reduce overtime during the next 12 months,
according to a June study by Financial Executives International, an advocacy group
for corporate financial management, and Duke University. And the number of
employees who are working part time due to economic reasons jumped from 3.2
million in March to 3.5 million in July, according to the Department of Labor.
KJC |
