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New Employer-Employee Contract Replaces Loyalty and Job Security

While US companies routinely help the workers they fire to find new jobs, many are beginning to realize that they must focus attention on the people who stay, in particular, by trimming their workload.

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IF the worst thing about corporate downsizing is losing one's job, the second worst may be keeping it.

Employees who survive round after round of job cuts often see themselves as overworked, insecure, and on the verge of burnout, downsizing experts say. Corporate America is slowly realizing the problem and moving to alleviate it. But in so doing, it is rewriting rules that have stood for at least half a century.

``That whole implied contract where you give me loyalty and I give you security - that's shattered,'' says Peter Berner, a managing director of Drake Beam Morin Inc., a human-resource consulting firm headquartered in New York.

``This may be as big a change as the Industrial Revolution,'' adds Carroll Stephens, a management professor at Virginia Tech in Blacksburg.

Some 40 to 45 percent of companies in the United States downsize in any given year, according to the American Management Association (AMA) in New York. Even in good times, companies are slimming down. Slightly more than half of the companies that downsized between July 1993 and June 1994 did so even though they did not anticipate a business downturn, the latest AMA survey found.

Careers were simpler two generations ago when Ralph Verdu went to work for United States Steel Corporation (today USX Corporation). ``I was working alongside men who were there 35, 40 years,'' he says. He says he expected to do the same.

That expectation held until the 1980s, when the bottom dropped out of the steel industry and US Steel began unprecedented layoffs. Corporate staffers called them ``Black Fridays.'' Employees would come in Friday mornings to find a notice on their desks telling them not to return on Monday. ``There was a lot of tension in the office, a lot of unhappy people,'' Mr. Verdu recalls. ``The people remaining had more work to do. Then they cut your salary.''


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