Choosing alternatives to layoffs

"Every morning and every night I create a feeling of gratitude for everything in my life," one woman said.

Said another: "Remembering that there are so many people with so much less."

Group therapy? No. It's a workforce training session held last month for the employees of Primary Freight Services Inc. of Rancho Dominguez.

The 66 workers in the small logistics company's local, Chicago and New Jersey offices had their pay and hours cut 20% to a four-day workweek in mid-February. Owner John Brown wanted to help employees deal with the emotional fallout.

The two-hour videoconferences, held each week for six weeks, covered how to beat job burnout and deal with stress and anger. The training was part of Brown's plan to cut costs while preserving employee morale and productivity.

He also shared sales numbers in companywide meetings, created lists of questions and answers that addressed benefits (they are untouched) and other topics. And he sent personal letters to each employee's home to acknowledge that the change would affect their families as well.

"It's hard, but you have a culture that we've created for 12 years, and you've got to stay true to that," Brown said.

He believes that sales, which fell 21% in the first quarter compared with the same period in 2008, will turn around. In the meantime, he and President Kathy Hogan, his sister, have stopped taking paychecks and are trying to avoid layoffs by cutting their biggest expense -- labor costs.

They aren't alone. About 1 in 4 companies have cut workers' hours by some degree, 7% have gone to a four-day workweek, and 6.7% have furloughed employees to cut costs without permanent layoffs, according to a January survey of 100 businesses by outplacement firm Challenger, Gray & Christmas.

"It might be the best of a bad set of options," said John Challenger, chief executive of the Chicago company.

Studies show that companies that choose alternatives outperform their competitors that resort to layoffs, said Amy Robinson, principal at workforce consulting firm Interchange Group in Los Angeles.

Small-business owners are looking to cut costs without inflicting mortal wounds on their companies. Some are cutting hours and pay to forestall layoffs. Others have already had layoffs and believe that they can't lose more workers without cutting into muscle. So they trim paid work time for some or all of their employees.