Company slashes salaries to avoid layoffs

February 17, 2009 4:19:30 PM PST
The economic recession has forced companies make a lot of tough choices. ACCO Brands, an office product company in suburban Lincolnshire, has decided that instead of laying off employees it will cut their pay. The company says it is the best way right now to save jobs.

The office supply business is dependent on orders. In this economy, ACCO hasn't been getting as many orders. They've cut travel, bonuses and 401K contributions. The company spokesman says the only thing left to cut was salary.

Employees at ACCO Brands received some very bad news: their salaries will be cut but 47 percent.

"These are very difficult decisions. This is tough news to deliver to employees. It's tough news to receive," said Rich Nelson, ACCO Brands.

ACCO Brands is the world's leading independently owned office supply company, according to the company's spokesman. The ACCO logo is seen on some common products found in most offices, like binding and staplers

ACCO's spokesman said all 2,000 ACCO employees in the United States will have their pay nearly halved in order to prevent layoffs.

"Our own alternative was to ask our employees to make a sacrifice," Nelson said.

ACCO's actions are not unusual. A recent survey finds companies have cut costs by reducing travel expenses, implementing a hiring freeze or reduction, permanent layoffs, cancelling employee holiday parties, and salary freezes or reductions.

"Companies are struggling to avoid layoffs," said John Challenger, Challenger, Gray & Christmas. ¶

Atlas Stationary, on Lake Street, has sold ACCO products for years, folders and electronics with that familiar ACCO logo. But Atlas' owner says he has noticed some changes: like delays in shipments.

"For right now, customers--we can't wait. They order, they expect to us deliver to them. That's what we do. So we found an alternate vendor but we'll be back when they get their act together," said Don Schmidt, Atlas Stationary.

As for the future of ACCO, the plan is to return employees to their full salaries by July. The third and fourth quarters are typically their busiest time. In the meantime, ACCO is offering emergency loans to employees who need help to get by the next few weeks.