Cooperman interviewed by Fortune on furlough trend
"America goes on furlough: Summer is prime time for 'temporary layoffs,' and they're happening in some unexpected places", Fortune
Harriet E. Cooperman, Partner and Co-Chair of the Labor, Employment and Employee Benefits Practice Group, discusses what is referred to as the "summer of furlough." Furloughs - when employers must take mandatory leave without pay - are underway across the country.
Furloughs are becoming increasingly popular, in large part because companies can implement them quickly and avoid cutting talent they would later need. In the past, companies would conduct layoffs and move on. But with many businesses already operating with lean staffs, further reductions would only impede workflow. "During the last big wave of layoffs in the '90s, there was what I'll call a lot of fat," Cooperman said. Companies were overstaffed, but now she said "we're lean and mean, but we still have to do something to cut costs."
Cooperman said she's heard of companies implementing a furlough while simultaneously giving a pay raise. The effect is psychological, she said - employees get the pay raises they're due, but the company doesn't incur additional costs.