Survey: High-paid managers losing jobs at higher rate

Raleigh Triangle Business Journa ^ | Monday, Jan 20, 2003

[Willie Green]

For education and discussion only. Not for commercial use.

Higher paid managers and executives are being discharged at a rate 24 percent higher than it was a year ago, according to figures from the outplacement firm Challenger, Gray & Christmas Inc.

This mirrors a similar trend that occurred during the last period of recession and jobless recovery, when higher paid workers saw discharges increase by 40 percent between 1989 and 1992, the company says.

In a fourth-quarter survey of 3,000 discharged workers, 41 percent of those seeking jobs earned more than $85,000 in their previous position. That's up from 33 percent a year earlier.

While the number of high-salaried job losers increased in 2002's fourth quarter, the percentage of lower-paid workers affected by job cuts fell. In that period, 22 percent of discharged workers earned less than $50,000 in their former positions. That marks a decline from a year earlier, when 34 percent of job losers were at the lower end of the salary spectrum.

The larger percentage of job seekers with higher salary expectations may be a leading factor for why it's taking longer to find a new job. In the fourth quarter, job searches grew to their longest in the 17 years that Challenger has tracked such information.

It took an average of 3.9 months for job seekers to find employment in the fourth quarter, up from 3.4 months a year before. It took unemployed workers surveyed by Challenger in the fourth quarter of 2000 just 2.5 months to find new jobs.

Further indication of the plight of high-paid executives comes from a special survey by Challenger of discharged executives earning more than $100,000 in their previous position. Among the executives finding jobs in the fourth quarter, the average job-search duration was 5 months.

[AppyPappy]

Trimming the fat.

[Willie Green]

globalism = work harder for less pay

[chance33_98]

Actually echoes my sentiments at my last job. I remember people like me, and many of my co-workers, had been with the company for awhile and they started hiring new people into managment. They paid the new managers more then other managers, in lateral positions, and kept doing this time after time. Add to that that in my dept we had 4 people at one time and two managers. Cutting the fat is good.

[SamAdams76]

It isn't going to be easy for these managers to find news jobs (as managers). Corporations are cutting their management structure to the bone. The corporation I work for has cut out two layers of management entirely. I am a branch manager and there are only two layers between myself and the chairman where there used to be four just 10 years ago. I actually find that things happen much more quickly around here as there is not as much red tape as there used to be. Of course, our workloads have increased enormously. Beep, beep, beep, beep (goes my pager)....

[stlrocket]

Look what happens when you go out to lunch - Hey - Does this mean I'm Fired?

[El Gato]

Trimming the fat.

Knowing the way most bureaucratic organizations, including corporations, work, I suspect the people being cut are moderately high level technical people, as well as other professional level "worker bees". Cut managers or their various support staffs? Not bloodly likely. Or worse they cut some competent lead technical person and replace her with a person with the appropriate educational bacground, but who has been a manager for 20 years. Then they'll wonder why the bridge falls down, or the return rate on the product goes through the roof.

[freeper12]

Part of the problem that people are going to find if they are highly paid and laid off, is that in fact they were being *overpaid*. I know so many people that are being paid salaries that are high enough that if they got fired they would be lucky to find something paying half as much as before...a pretty scary situation for those folks. (because in most cases there spending kept up with their salary increases)

The dot-com boom made people lazy...getting paid a ton of money for very little effort...those days aren't coming back any time soon for most folks.

[vannrox]

Count me as one such fellow.
Humbling. Indeed.

[glowworm]

Most older people can see this more clearly.. They are OVERpaid.. and probably couldn't do a lower job if they tried...

In the 50's, lower level, mid level, and yes some senior level managers.. had to go through most of the lessor level jobs and actually prove their ability.. If they had it, the rose to the top.. There was great respect for managers as they were once where they worked.. Most middle class workers made more than their supervisors.. It was considered a "cushy" job for managers, MBA's were the bottom of the totem pole.. " Foremen" got 10% higher than the top rated worker, Middle managers maybe 30%, The plant Superintendant maybe a comfortable 300%.. All were happy??

Enter the college Elite "takeover'.. Degree = Income.. The corporations were induced by the Federal Government to drop their internal apprenticeships and internal promotions for outside schools to "certify" fitness to hire.. Ergo. Few internal promotions and a class destinction between "college trained" and internal "workers". No more was their respect but.. "friction".. MBA's and higher degrees are suddenly worth a multiple of workers wages. So now.. there a class of high earner$ and dead end earners.. :(.

So now, when the new "High Class, High Level" person gets his desk taken away.. There comes a flood of alligator tears.. I am a true compasionate conservative.. I would be willing to train them to properly to use a paint brush, a broom, a saw, a torch.. or any tool to support themselves and maybe they could work upward. And this is no joke..

[AppyPappy]

I doubt a tech would make that much. These are probably project leader positions

[StolarStorm]

Most of the high earners that I know of that have been laid off are specialized tech people. An experienced tech with a certain skill set can indeed make the salaries mentioned. However, these jobs are typically located in very expensive areas (silicon vally, etc)... so really the salaries are not as impressive as they sound. A carpenter making 40,000 a year in a mid sized city has a higher standard of living then a "over paid" tech in a big metro area.

As for the idea of managers being laid off... I haven't heard of that happening to any large extent. They almost always protect their own. I agree with the poster who suggests that most of these layoffs are techs.

[blueriver]

They almost always protect their own. I agree with the poster who suggests that most of these layoffs are techs.

Yes, American tech workers are being shut out of working in America while foreigners are being hired. See the 2002 data: http://h1b.info/