Sunday, December 21, 2008

Employers using down economy as cover to cut fixed costs, say critics

FedEx declares sizeable profit, then cuts workers' pay; open season on benefits?

December 21, 2008 9:30 AM ET

(Reuters)—Federal Express’s decision this week to force its salaried workers to take at least a 5 percent pay cut and to suspend its 401(k) match isn’t just bad news for the shipping giant’s employees.

Experts say the takebacks are an ominous sign of things to come at many other U.S. companies as businesses—even healthy ones like FedEx—adopt defensive corporate crouches in response to the worst economic downturn in decades.

The moves also underscore how much the tables have turned on U.S. workers as a result of the economic crisis, which has put employers firmly back in the driver’s seat.

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