Where Did Everyone Go?

When Winstar Radio Services laid off a third of its New York City staff, the surviving employees felt little relief. Not only had they lost cherished colleagues, but they were also struggling with added work — particularly that of the office manager, who was among those who got pink slips. Although the remaining workers at Winstar (since acquired and renamed Excelsior Radio Networks) resigned themselves to doing their own filing and photocopying, they overlooked one small but essential task. Says Christopher Stogdill, 32, an affiliate marketing manager: "We ran out of toilet paper."

Welcome to the workplace of the jobless recovery, where keeping your position means that your In box swells, your pay and benefits shrink, and bathroom amenities don't magically appear. In an office haunted by the ghosts of laid-off employees, those workers who dodged the hatchet aren't necessarily the lucky ones. They must excel at their old jobs to avoid still looming staff cuts and must also juggle extra, unfamiliar duties.

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The future looks just as spooky. Even as sales pick up at many firms, top executives fear that business in 2003 will remain shaky. With inflation dead, most have no power to raise prices, and they see cost cuts — especially layoffs — as one of the few ways to eke out profits. Companies have already cut 1.2 million jobs this year through October — that's about 3,600 a day — according to Challenger, Gray & Christmas, the Chicago outplacement firm. Sun Microsystems, Boeing, McDonald's and J.P. Morgan Chase have announced that they will slash thousands more jobs in coming months, and many experts predict still other layoff announcements by year's end.

As layoffs rise, so does productivity. The Department of Labor reported last week that nonfarm business productivity clocked an annualized gain in the third quarter of 4% over the preceding quarter. In a typical slump, productivity declines as output tumbles along with hours worked. But this time employers started shedding workers early. And they're still doing it, even though most economists consider the recession technically over. Some employers have boosted productivity by using temporary workers in place of full-time staff. For others, heavy investments in technology made during the fat years are paying off. This holiday season, for instance, the Louisville, Ky., air hub of UPS will rely on a new, $1 billion automated sorting facility instead of the usual army of seasonal temps.

In most cases, however, bosses are simply leaning harder on their remaining staff, pushing some workers to the brink. "I'm tired, cranky and frustrated," says a 35-year-old vice president of the commercial lending division of a Chicago bank. "We don't have any support, so you have to do everything yourself. I don't have time to go out and develop new deals and make my objectives." Still, the tenuous employment scene fills her with enough fear that she asks to remain unnamed. "I have a good salary, so I just resign myself," she sighs.

The Department of Labor has not reported longer work days, but then the government doesn't track hours kept by managers and others who don't get overtime pay. Consider Melanie Mancebo. A recruiter for Atlanta-based IT staffing-and-consulting company AGSI, she's so exhausted from 10-hour days and weekend work that when she gets home, around 8:30 p.m., she heads straight to bed. Mancebo, 34, whose job is to hire tech talent, also handles research, sales and client relations. "We've always done a lot of pitching in around here," she says, "but now more than ever. It's definitely tiring." AGSI has imposed a hiring freeze and has upped productivity 23% over 12 months.

Not surprisingly, any increased productivity gleaned from the sweat of a layoff-decimated work force results in plenty of grousing. Manufacturing workers call ghost work "speed-up" (because the remaining employees have to hustle harder) or "stretch-out" (because of the longer hours). "They call it productivity," says Lane Windham, an AFL-CIO spokesman, referring to management.

Dell, the computer maker, hacked 5,700 of its 40,000 jobs in the U.S. last year. In the year following, Dell has grown its revenues, profits and market share—thanks in part to the lower prices it could offer because of shrunken payrolls (now back up to about 38,200). "A lot of us are unhappy, but what are we going to do — go somewhere else?" says a longtime employee of the company, which is based in Austin, Texas. The computer industry ranks second after telecommunications in layoffs this year, according to Challenger, and that limits disgruntled workers' options.