Older workers escaping the ax

By BusinessWeek

Last fall, drugstore chain CVS Caremark cut about 800 jobs in Northern California after acquiring Longs Drugs, a Walnut Creek, Calif., pharmacy rival. Despite those cuts, the company continues to recruit baby boomers and other older workers to staff stores across the country.

"We need their expertise," says Stephen Wing, the director of work force initiatives at CVS Caremark in Woonsocket, R.I. "When you're in your 50s and 60s, you're in your prime."

Companies nationwide are laying off workers by the tens of thousands. But many are trying to spare the post-55 set from the ax, a reversal of the top-down trends in past waves of layoffs. They're being driven by legal concerns -- since boomers are in a protected age group -- and by a need to keep experienced hands in place to keep the companies running and positioned for an upturn.

"Seniority matters," says Marcie Pitt-Catsouphes, the director of the Sloan Center on Aging & Work at Boston College.

All age groups are being hit by cuts now coursing through corporate America, but government statistics so far suggest the burden is falling far more heavily on younger workers. The unemployment rate among workers 55 and over is not only lower than for the younger set, but it has risen less sharply.

Joblessness for those 55 and older jumped to 4.9% in December, a rise of 1.8 percentage points from the 3.1% level of 12 months earlier. By contrast, for their colleagues ages 25 to 54, the rate climbed to 6.3% in December, compared with 4% a year before, a sharper rise.

The different impact comes into even more stark relief with the government's measures of employment. The number of people employed in the younger set has fallen from 100.5 million in December 2007 to 97.7 million as of last month -- a 2.9% slide. By contrast, the number of those working who are 55 and older has actually risen by 878,000, climbing to nearly 29.1 million.

Fewer buyout offers

Some companies have taken deliberate steps to hang on to veterans. Many, for instance, are shunning voluntary buyout offers, which tend to encourage older workers near retirement to jump ship, and instead are targeting cuts to keep the most productive workers. When Charles Schwab & Co. recently eliminated about 100 positions, it identified the positions it no longer needed rather than letting workers opt out wholesale. The company's most conspicuous old hand, Chairman Charles Schwab, 72, wasn't among those urged out the door.

Similarly, involuntary cuts are planned at a broad range of companies. Among them are Alcoa, which is cutting about 13,500 jobs, Advanced Micro Devices (900 jobs, plus some 200 cut in a divestiture or through attrition) and WellPoint (about 1,500 jobs, including 900 unfilled positions). Typically, says outplacement expert John Challenger of Challenger, Gray & Christmas, companies move to such involuntary cuts "as a recession wears on" and they find they remain in trouble. He expects to see the numbers of involuntary cuts climb.

Even when they offer voluntary buyouts, companies typically reserve the right to say no. Walgreen, for instance, is offering a voluntary program as it tries to cut 1,000 jobs from its 11,000-person corporate and field manager work force -- but a spokesman pointedly says management will decide which of those who apply for the buyout will get it. If Walgreen doesn't generate 1,000 departures, it will move into a targeted involuntary program. Often, adds outplacement expert Challenger, "companies will go to their best people and say, 'We don't want you to go.'"

Separately, Walgreen, which employs about 237,000 people overall, is continuing to work with AARP in a program designed to attract older workers for its stores. Both CVS and Walgreen want to attract and keep older workers, especially on the store floors.

"They come to you with the work ethic and the customer-service skills we're looking for," says CVS executive Wing. Customers seeking direction on over-the-counter treatments for minor ailments, he adds, often find comfort in people who have "had that ache or pain." They're also seen as role models for younger workers.

Continued: The value of experience

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