First-Quarter Layoffs Back in Fashion, Big Time

BOSTON ( TheStreet) -- Happy New Year, we're letting you go.

With companies including Northrop Grumman ( NOC), Yahoo ( YHOO), Sunoco ( SUN) and TJX ( TJX) planning cutbacks in the first quarter and some layoffs already begun, employers and the outplacement agencies that help them downsize are welcoming the post-recession return of the post-holiday layoff. Between 2003 and 2007, the Department of Labor's Bureau of Labor Statistics says the number of layoffs in January outpaced December layoffs every year but 2006. January and first-quarter layoff postponements were also popular during the decade before the terrorist attacks of Sept. 11, 2001, according to BLS data.

Employers and the outplacement agencies that help them downsize are welcoming the post-recession return of the post-holiday layoff.

"Even during other recessions, like 1987 through 1992 and years like that, we did not see huge layoffs in December," says Kate Wendleton, president of the Five O'Clock Club, a New York-based outplacement and career counseling firm that's helped companies handle layoffs since since 1978. "Companies were more altruistic and did not want to lay off people, but in this recession companies did huge layoffs in December."

The number of employees laid off in December 2007 bested January 2008's total by nearly 5,000, according to the Department of Labor, while third-quarter layoffs in 2009 topped first-quarter 2010 by more than 90,000. Even when January 2009's layoff numbers exceeded December 2008's, the number of companies laying off employees the following December eclipsed January's total by more than 2,000.

"We tried to convince companies not to lay people off in December and not lay them off until January, but CEOs said no," says Wendleton, who notes that December was her company's biggest month for both outplacement and revenue in 2007 because of companies who saw the recession coming. "We would say to companies in 2007, 2008 and 2009 that three weeks doesn't make a difference and to keep the people on and cut them in January, but HR people would go back to their CEOs, who wanted them cut now; I think there was panic at the top."

That panic has largely subsided, Wendleton says, with companies returning to form and calling her firm in October, November and December about first-quarter layoffs. She suggests that companies may be feeling more good-natured after unemployment dropped from 10% at the beginning of last year to 9.8% in November and 9.6% in the three months prior -- adding an average of 86,000 jobs a month since the December just passed -- though she cautions that her firm expects massive layoffs this month. One of her colleagues, however, isn't so convinced holiday spirit helped companies delay layoffs from December.

"Some companies are quick to release people and others dawdle," says Bill Ayers, vice president of the Ayers Group, a career management firm and division of the Kelly Services ( KELYA) outsourcing and consulting group. "We're seeing people take on old habits, but they're doing it for different reasons."

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