After hearing Wednesday that 1,000 pink slips would soon be dispatched at the Naperville-Lisle campus of Lucent Technologies Inc., some employees were philosophical about the realities of the new economy–and the importance of a company’s stock price.
“People actually welcomed the news,” said Yvonne Huang, an engineer who has worked for two years at the Naperville facility, pointing out that the downsizing will likely boost the company’s stock price and thereby increase the value of employee retirement plans. “We know you have to take some pain to get there.”
Gone are the days when loyalty to a business was rewarded with a company-funded pension plan. Also gone, it appears, is universal hand-wringing when a major employer announces it is laying off much of its workforce.
On Wednesday, Lucent, a maker of high-speed telecommunications equipment, announced it would slash 16,000 jobs worldwide, including about 1,000 along the East-West Tollway high-tech corridor in DuPage County. The figures represent 13 percent of the workforce worldwide and about 9 percent in Illinois.
In response, DuPage County business leaders said the move was a positive step for the long-term health of the company, whose stock price plunged 80 percent last year because of production and other problems. In contrast, McHenry County leaders were rattled earlier this month when Motorola announced it was cutting 2,500 jobs, or half its workforce, at its Harvard plant.
“There’s still a lot of technology, gadgets and gizmos that are yet to be developed and marketed, and I think Lucent will stay on the cutting edge,” said Christine Jeffries, president of the Naperville Development Partnership.
“But it’s still a very sorry day to be losing 1,000 people…. As far as the economy of Naperville, we still have a tremendous amount of growth in the community,” she said. “Hopefully, those workers who will be let go will be able to assimilate into growth fields. The need is there.”
DuPage leaders say solid job growth has left a soft cushion for the laid-off workers. Other growing companies, they said, will offset the loss of jobs in the region. Jeffries said Naperville has added some 12,000 jobs in each of the last two years and she believes the growth will continue because of start-ups and other companies that dominate the East-West corridor, such as Tellabs and Molex Inc.
Also, DuPage business leaders said the employees coming out of Lucent are well-trained in today’s hottest industry–telecommunications–which gives them more options when looking for jobs than the traditional factory worker of yesterday’s economy.
“You have 1,000 people who have been trained working for the industry leader who now can be made available for other companies in that industry,” said Bonnie Wood, executive director of the East West Corporate Corridor Association, which represents businesses in the DuPage area.
Indeed, Molex in Lisle usually has three to four full-time recruiters working to fill between 20 and 30 positions each, said George Hyland, manager of compensation and employment for the electronic-component maker.
“I think the economy is still a strong one,” Hyland said. “I don’t think there’s a need for people to hit a panic button.”
For Wood, Lucent’s move was noteworthy because it acted quickly to cut costs, thereby paving the way to increase profits. Though rumors about imminent layoffs had been circulating for months, the company was in trouble for only about a year when it made the move. Under the old model for businesses, large companies are generally less nimble, less able to change when the market demands it.
“It didn’t take Lucent a long time to respond,” she said. “This is an example of the new economy.”
Though the company notified some employees Wednesday that they would lose their jobs, others may not find out until Feb. 15 or even March, said Robert Jerich, Lucent spokesman. Many of the cuts will be in marketing and sales, product development and administrative staffing, Jerich said.
The upbeat attitude of analysts and local business officials was not shared by everyone, of course, particularly those employees who are facing unemployment or fear losing their jobs. One employee who wondered Wednesday if she would still have a job next month said the mood was tense in the Naperville and Lisle offices.
“You are always in that situation of being nervous,” said the employee, who declined to give her name.
Tom Groszczyk, who has worked in research and development at Lucent for 32 years, was shocked at the news that so many employees would be laid off in Illinois.
“We knew something was coming, but I don’t think we knew it was that big a number,” Groszczyk said. “I think we’ll get hit here.”
Phillip Cotton, a software developer, said he had heard rumors leading up to Wednesday’s announcement, but he said there was no panic among his co-workers.
“Around here, the atmosphere is still pretty calm,” he said. “We have plenty of work to do.”
