Friday, January 15, 2010

Why would struggling company reinstate benefits?

Rob writes:

My company, an architectural firm, had a difficult 2009. Thirty percent of my co-workers lost their jobs and those who remained had salary and benefit reductions. Effective January 1st, 2010, our company reinstated the 401(k) company match. Employees took this as a sign the company’s financial status had improved. Then last Friday, three employees were laid-off; one worked in marketing and the other two were administrative employees. One had been with the company 30 years! What is going on? Why would my company reinstate benefits then turn around and let three employees go?

From my experience working for an engineering firm, engineering and architectural firms compete aggressively for top talent and feel they need attractive benefit and salary plans to attract and keep employees. You write your company laid-off 30% of their workforce. In doing so, they most likely lost talented employees and feel they can’t afford to lose anymore of their professional staff. Your company’s management reinstated the company match to increase confidence and improve moral. Also, they have to be confident in the company’s future financial outlook or they wouldn’t have bothered with the match.

As to the three employees who were let go, I think all companies who experienced tough times in 2009 will continue to look for ways to cut costs well into 2010. Perhaps your company has decided to outsource their marketing. My own company has done so and reduced our marketing expense by 65%. Improved technology, reduced workloads due to poor sales and job combinations could all have contributed to your co-workers losing their jobs. I realize it is sad to see them go, but a company in a fragile industry such as yours has is to remove every unnecessary cost in order to remain viable in 2010. The worst is over, but it is still going to be a bumpy ride.

According to, Architects saw more job losses in 2009 than any other profession. They attribute these losses to tough times in the construction industry. They also sight the BLS most recent Labor Review that looks at employment projections through 2018 which shows that architecture and engineering occupations will grow by about 10 percent.

As an interesting side note, sites health care as the only industry that added jobs last year. Other professions losing the most jobs in 2009 were:


Production supervisors and assembly workers


Computer software engineers

Mechanical engineers

Construction workers


Bookkeeping, accounting and auditing clerks

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