“I can’t remember a busier time,” Says Managing Partner At Layoff Firm

In 2009, Layoffs Is the Business to Be In


Ryan Teixeira said that after Yahoo fired him he got “basic tips” from Right Management, an outplacement firm Yahoo hired.

By BRIAN STELTER
Published: January 20, 2009

As companies across the country eliminate hundreds of thousands of jobs, one field is hiring: the layoff industry. Businesses that specialize in “career transition” can barely keep up with the demand as corporate America cuts staff.

Banks, manufacturers, media companies and other industries have relied on the businesses to a greater degree in the last year as economic conditions have worsened.

“I can’t remember a busier time,” said Elaine Varelas, a managing partner at Keystone Partners, based in Boston. Right Management, another company that specializes in outplacement, reported a 39 percent increase in profit last fall. And William L. Ayers Jr., president of the 28-year-old Ayers Group in New York, said his business had had a 75 percent spike in so-called career transition work last year.

In some cases, the companies do everything except deliver the bad news. They provide scripts and “termination training” for the managers. They counsel the laid-off workers and later offer them résumé-writing seminars and office space for job searches.

Ryan Teixeira is among the unwitting clients of the outplacement business, which was called the “industry that guilt built” by Fortune magazine two decades ago.

Mr. Teixeira was a software architect at Yahoo until Dec. 10, when the company laid off about 1,500 people. As documented in a series of slides leaked to the Silicon Valley blog Valleywag, managers were instructed to tell employees like Mr. Teixeira that “we’ve had to make some tough decisions around eliminating a number of positions.”

The script continues, “Your position is one of those being eliminated.”

After the conversation, Mr. Teixeira was led to a room, where he was met by a Right Management consultant, with two other terminated employees.

“The topics discussed were not very deep,” he said. “They give some very basic tips on what to do next. They answer any questions they can. It is all about moving on.”

The postlayoff session “allows the individual to vent,” Mr. Ayers said, “about their angst, their anger, their fear.”

It is a time to let off steam — and avoid what he called “bad and potentially disastrous behavior” — and figure out what to tell family members and friends. Outplacement advisers say the sessions lower the chance of public disputes, employee theft or even people harming themselves.

A day or two later, the employee will typically attend a seminar about résumé writing, job-search tools and applying for unemployment benefits. The outplacement consultants essentially act as a version of a high school or college career counselor.

The clinical language used in the Yahoo script is also typical. Within the third-party companies, a mass layoff is called a RIF, short for “reduction in force.” The termination day is the “day of notification,” and the initial meeting with a laid-off worker is a “pickup.” Consultants are careful to say that people are not eliminated, positions are eliminated. (Or, preferably, they are “made redundant.”)

But laid-off workers, of course, do take it personally. The third-party companies act as the “cleanup team” at the end of the layoff, said Alan Whitton, who had worked at Nortel for 20 years when he lost his job last August. “They deal with folks like me who knew it was coming and ask a couple of questions and bug out — and those who didn’t see it coming and are still in shock,” he said.

After being notified by phone of his termination, Mr. Whitton was walked through the severance package by a human resources worker, who then introduced him to the outplacement representative. He was asked about his feelings, handed a binder of information and asked to attend an orientation session the next day.

Several of these outplacement companies say that they are hiring to help companies lay off workers. Right Management’s overseas practice is adding staff in Austria, Poland, the United Arab Emirates and other countries. The Ayers Group, which employs about 30 people in the New York-New Jersey market, hired an additional consultant last month.

Until the last year, the layoffs in the wake of the 9/11 attacks were the worst that Mr. Ayers, who started his company in 1975, had seen. But the current layoffs have been “broader, wider and deeper,” he said.

The national unemployment rate rose sharply in the last year, to 7.2 percent in December, from 4.9 percent in January. The executive outplacement firm Challenger, Gray & Christmas estimates that corporations planned the layoffs of more than one million people during the year.

Ms. Varelas of Keystone Partners said the severity and the swiftness of the current economic crisis were similar to the banking crisis of the early 1990s. This time, though, “we’re much busier,” she said, “and partly that’s because career transition and outplacement has become a much more accepted benefit.”

She said a basic package of services for a departing employee, including a one-day seminar, can cost about $1,000.

When they are not dealing with mergers, acquisitions or layoffs, many of the career transition companies also offer executive coaching and other good-economy services. What worries them most, then, are so-called slack tide periods, when companies are neither hiring nor firing.

Mr. Teixeira says he believes the outplacement companies are here to stay. “Changing jobs is becoming the norm,” he said, citing his firsthand experience. In fact, when he was laid off from Yahoo last month, the Right Management consultant looked familiar. He had first met her a year ago, when he was laid off from his previous job.

 

Didn't Teixeira just sign a huge deal with the Yankees

 

Can't wait to see next month's job loss numbers...