UPPER MANAGEMENT LAYOFFS
THE merger-acquisition fervor of the past decade has led to some layoffs of workers within the United States - particularly among professionals at the managerial level and among highly paid skilled workers within the manufacturing sector. But are those layoffs widespread enough to have a national impact, hurting house sales in upscale communities, cutting into the business of those retailing to high-income customers?
``We are definitely starting to see examples of job losses because of mergers,'' says a member of an economic ``response team'' that studies the impact of plant closings and other structural changes pertaining to corporations. The official is with New Jersey's Department of Labor, based in Trenton.
``There is a clear linkage between mergers and layoffs,'' says the official. ``We've noticed that once the merger occurs, some departments in the acquired firm are very quickly done away with, such as the accounting department. Many of these people [whose jobs are lost] tend to be professionals or from middle-management posts.''
But economists are uncertain whether there are enough data to measure any connection between mergers and poor business for what used to be called the carriage trade. Indeed, little actual research has been undertaken on the subject since the ``merger fervor'' of the mid-1980s, according to labor economists. More statistics are being gathered throughout the US as a result of the 1988 enactment of the federal plant-closing law, which requires medium-size or larger companies to provide employees with 60 days notification of plant closings under certain conditions.
Still, anecdotal evidence is piling up of job losses resulting from mergers and hostile takeovers. Many companies have cut work forces to boost profit margins - and in the process avoid a takeover. In the consumer-goods/ grocery sector, where mergers and consolidations have become commonplace, in recent years, job losses have been far from unusual. Sometimes entire chains have disappeared, as happened in late 1986 when thousands of workers at Gemco, a discount store in California, suddenly found themselves out of work following a hostile takeover.
Is there a linkage between rising real estate inventories in affluent cities such as Wellesley, Mass., and merger-related layoffs among high-paid professionals?