i've worked for a number of different types of design firms. in my experience the answer is a. i did work for one firm of about 15 ppl. it was an architectural firm. they did b. for three month we all took a 20% pay cut and only worked four days a week. they really did not want to fire anyone because they valued us all and we worked well as a team. they reviewed the idea with the entire office before implementing it. once they got feedback from everyone they also stated that if anyone had issue with the idea or financial problems as a result of the idea to come talk to them. the bosses took a 40% pay cut and still worked 5+ days.

three months later we were all working 5 days a week with full pay. as a result, i think the bosses earned everyone's respect. they took an extremely difficult situation and handled very well. personally, i would opt for b, but this does become more difficult the larger the firm.

the places i've worked typically approached severe, long-lasting downturns with layoffs, although i've never been caught up in that myself.

it was very painful -- there was a lot of discussion about this in the studio afterwards -- one group thought the firm should have just "sucked it up" and kept everybody on at full pay (a very naive perspective) -- others thought everybody should have taken a pay cut (to which the first group said, in effect, "i can't live with a pay cut") and the others thought the firm did the right thing (of course, these were among the survivors)

one thing i have observed is that firms that use layoffs really make an effort to identify and keep those members of the staff who are true contributors -- while it's a little embarassing to say this, layoffs can be like forest fires -- i.e. they're destructive in the short run, but they do eliminate the deadwood and serve to rejuvenate the forest

my experience - on september 30th 2001, all staff were laid off, and the remaining associates & partners all took a big pay hit.

i heard this from a 60 y.o architect in 1985;
welton and becket laid off (fired) all the architects on the 'right side' of long drafting room on an afternoon after the lunchbreak in 1973. he was on the left side and got fired 3 months later.

i think we've all heard these apocryphal stories about massive layoffs in large firms -- those have become part of the urban legend

however, what i'm really trying to undestand is how moderate sized firms deal with routine (?) fluctuations in the economic cycle -- what are the pros and cons of the options outlined above -- are there other options ?

I worked at a 150 person firm in the midwest for about 9 years. Last summer things were slow so they layed off 15 people and gave the rest of us a 10% paycut for 3 months. Because of the paycut 5 more people quit, me included. I moved to Texas. The economy in my home state still isn't great due inpart to the problems with the Big 3.

Another tactic the firm is using right now, due to the shortage of work, is loaning staff out to other firms that have work. In the past the firm has also borrowed people from other firms in town that didn't have work.

most recently lost my job when bush invaded iraq and my office lost the 2 jobs i was in charge of ( nothing to do with iraq but the developers took advantage, right after we got planning permission too )...boss hated to do it but small office and no work means sayonara, try tommorra, nice to know ya, yada yada.

i didn't mind, was parta that particular game as i saw it...

but my first office was a bit different. during a downturn (after i left) the boss did something more like digger describes above. That particular boss was a bit unusual though, as he would give an architect a pay raise when his/her baby was born as much as in response to seniority and experience. family owned business, and all employees adopted for life...babies cost money you need a raise, and you won't be fired if i can help it...-sorta thing.

nowadayz, a lot of my friends in the biz (and me too come to think of it) sorta keep things loose, working in collaboration with folk they like when the jobs turn up then split when the job is done. so laying off and pay-cuts and such aren't really part of the picture (yet). World is changing...

Those massive layoff stories are mostly 1980's when the market dropped out, at least in the NE. The principals here used to have a much larger firm 80 or so. One day they went into the main drafting room and told everyone they were done. During this time the principals also lost basically everything, just to keep it in perspective. The people around now that were in the area at that time are saying how this boom reminds them very much of the 80's...

take the opportunity to remove the dead wood, but only the dead wood. When that's done, then re-examine whether everyone can keep their current salaries or not.

Time for a bake sale or Bob's gonna have to go.

I think the layoff thing is prefered in this job market, depending on where you live, and most firms understand that, so that is what they do. If there are other jobs out their and you dont have work you are doing everyone a diservice to keep people around. Its also a good way to clean out dead weight.
Getting laid off can be bad, but it can also be the best thing that ever happens to you, and most employers realize that. Asking everyone to take a paycut just sucks all the way around. Lets face it most people dont make that much in this industry as it is, a 20% pay cut just makes you broke and employed.

i have something of a companion question, raised by j's comment immediately above - at a firm where i worked when 9/11 happened, the aftermath caused a severe and immediate decline in revenues - my impression was that the firm worked really hard to keep everybody as long as they could, but eventually, they had to have a moderate lay-off - when it happened, i think the firm gave 2-3 weeks of severance pay

there was some real bitterness that the severance pay was so limited - i spoke with one of the owners about this later and was told they had to choose between two bad choices - a) terminate those folks earlier and give them a bigger severance package, or b) keep them on the payroll absolutely as long as possible, with the hope that something would come in and remove the need for the layoff - he said they chose b) and gave the largest severance package they could afford when the time came -- he said to this day they are not sure they made the right choice

what should they have done, in your opinion ? cut-em-loose early (perhaps prematurely) with a better severance package -- or keep-em-employed as long as possible, until the money runs out ?

jabber, I think the problem is hind sight is 20/20...who can tell what is best, and what is best for the individuals vs. a group of individuals

some choice: "broke and employed" vs "broke and unemployed"

my preference, as an employee, probably would depend on how i feel about the place i work -- if i really like the firm and would like to build a career there, i'd like to hang as long as possible -- if i'm really indifferent about the future and simply look at the job as "paying work" then i think i'd like to be cut loose as early as possible with a decent severance package

however, i'm NOT an employee any more -- so, faced with this decision, i'd probably have to guess -- my general feeling is that most anybody i'd put into the "layoff pool" probably isn't somebody i'd really hate to lose -- if i thought there were other jobs available in the community, i'd probably try to "farm them out" -- if that didn't work, i'd probably lay them off as soon as i was reasonably clear that we were not going to have paying work for them to do

jabber, i would have made the choice that your bosses made, but when the office had initial conversations about the problems that may face the office, i would have made the staff aware that the office is facing hard times and that if things do not turn around, layoff would be possible. i believe transparency in an office is a good thing. letting someone go is never an easy decision.

i've never been laid off, but while i was at som there were six quarterly layoffs, reducing the size of the firm by what seemed like 60%. many many people i knew got the ax. the stories above are not apocryphal nor exaggerated.

it's easier to lay people off when you a.) don't know them personally and/or b.) the HR people do the dirty work for you. i think relatively few small- and moderate-size firm owners lay people off without a lot of intestinal suffering.

i would probably take a closed-ended pay cut (that is, one with a definite end) than see people get laid off. the idea that a work day per week is cut would also be preferable. indeed, i'd like that right now, thank you! just kidding...

of course, many layoffs happen not because there's no work but because the work isn't profitable or the firm's being driven into the ground by its leaders. i never detected that the partners at skidmore were flying coach or staying at the holiday inn to cut expenses, even after 9/11. and lest we start talking about pennies vs dollars -- an on-demand first-class ticket on BA from chicago to london for the 20th of february costs $14,000 round-trip whereas a coach ticket costs $1,600 round-trip. both of those being flexible scheduling. flights of this nature weren't any cheaper back then, either.

that $12,400 difference was more than 1/3rd my salary at the time. seeing as how the partners at som chicago probably made that trip a combined 50 times a year -- that would have saved 12 jobs at my level.

i meant, 16

what's a severence package?

... to be fair, do you know that the cost of that plane ticket actrually was coming directly out of SOM's cost structure, or was it a reimbursable expense ? typically, project travel in a firm like SOM is a reimbursable expense reimbursed directly by the client, independent of the professional fee ... it's a 'pass through'

you also might want to consider that a lot of senior design professionals who travel regularly have a gazillion frequent flyer miles that would enable them to upgrade to 1st class without really costing the firm or the client anything beyond the cost of a coach ticket

now, i'm not defending any of the behavior that you describe in your post - our firm has a STRICT policy about no-first-class tickets on either the firm's or the cleint's nickel and i've seen travel costs truly abused at other firms where i've worked. all i'm cautioning is that "appearances aren't always what they might seem"

momentum: a "severence package" is when they wack off your 'nads and hand 'em to you in a paper bag.

hmm..

ok - lets look at this:

- I'm on salary (60K) and I work usually 50-55 hrs/week when I'm supposed to be 40hrs/week

- I usually get here at 7:30~8 (its a 9:00 office) and work usually until 7 -8pm. Especially when theres things that have to be done. Then its last train catching time.

-I work until its done right, often having to go to the principal to get chewed out on miniscule bullshit

-My boss is a...how could I put it... A S S H O L E that nobody can work with-absolutely nonprofessionally temperemental and erratic. On meds for that...

-I handle EVERYTHING for a fairly large project as efficient as possible considering I'm working basically alone aside from a stark-raving lunatic called a boss.

-I got "let go" because the job's nearing the end and there's "not enough jobs to hold you up"

Can someone tell me what happened here?

btw - this was a thread earlier - this is why we quote-unquote "sell out" b/c of bullshit like that

kyll, i think you said it, your [former] boss is an asshole. before i got to that line about being let go, i was thinking 'man, that person needs a new job.' i know it sucks to lose a job, but maybe this is a good thing. best of luck.

ochona: I agree with stone that most contracts include travel as directly reimbursable by the client. Sometimes very local travel (for example within 60 miles) is stipulated as the firm's responsibility. Sometimes travel time is only billed at 50% of the regular rates. But beyond that, it's usually the client's dime. Of course if this is abused it will have longterm consequences with client relations and the firm's reputation - but it isn't something the firm can immediately cut back to save money, since it's not their money in the first place....

Principals I've known who have considered paycuts have talked about this as a tactic that will usually prod some employees to quit soon afterward. (The firm is always better off if some people decide of their own volition to leave, because then the firm's unemployment insurance doesn't have to pay, and it also saves someone else's position or at least staves off someone else's layoff.)
In firms I've worked in that have had layoffs they've usually gone after people whose ratios of salary to billing rate are highest, which usually means project managers and other senior-level professional staff - or those positions that aren't generally directly billable to clients (such as office support staff, marketing staff, graphic designers, IT staff, and those people whose time is primarily spent in preparation of competition materials, proposals, presentation materials for completed projects, etc.)
Interns and other more junior staff have usually been pretty safe as long as they've been productive and usually involved with active projects.

I know that some firms are more likely to do things somewhat the opposite - because they may be more concerned with retaining long-term people with seniority, or with protecting people who have families. I guess I have worked for people who have been more concerned with the simple mathematics of the situation in the short term!

well yes, it actually is a good thing - but i said he's an a-hole, not a DUMB a-hole. my question is (and not tooting my flute here): why would you let someone go who is very capable in every aspect you need to handle a job instead of working out something for them to stay? at least ASK the bugger if he'd be willing to take a cut? something..? maybe i'm missing something here, and i've thought about my weaknesses. they're just not enough for what happened - i mean- i get praised everywhere BUT in my boss's office.

its just...well as you said it... my ego took an unwarranted and unneccessary blast causing bitterness, and now i just want the firm to fu@cking sink as soon as i step out the door.

which is what some told me would happen, so keep your fingers uncrossed.

and bloopox, thanks for your post - it clears some things up. my boss recommended me to another firm (ok - so he's not THAT bad) but I'm to believe that its because their extremely miserly asses just dont want the unemployment insurance to smack em in their stingy behinds.

(wshew - venom spewage)

kyll: I don't think that you need to assume that about your employer. I mean, yes - it's in his best interest if he finds somewhere for you to go voluntarily. But on the other hand, there's no reason to think that he doesn't also have the kind-human-instinct to help you find a good alternative if he absolutely can't keep you on...

As for your first question: well, I know the firm I'm at now would definately make an effort to keep a good employee around as long as possible. In fact we have done so occasionally during times that seemed like slow spots between projects. In those cases we've usually kept people busy with all the "luxury" tasks that none of us have time for when we're busy - like making marketing materials, renderings and models of unbuilt projects, entering competitions and doing presentation boards for awards entries, photography of built projects, firming up CAD standards and such.
But, sometimes there's only so much of that work that the firm can afford to pay for. If it looks like business will be picking up soon then that's one thing. But if there are no big projects on the horizon then firms sometimes reach the point at which they have to let someone go.

you don't work at skidmore two weeks, let alone two years, without figuring out that sure! travel expenses of the type i mentioned above are client-reimburseable. REIMBURSEABLE. that means the firm is paying for the flights, the hotels, the dinners initially and then hoping the client gets around to paying their f--king bill.

in the last good quarter som had before i left, 2000 3rd quarter, the entire firm had $110M in outstanding accounts payable. $110M in overdue fees.

prudence would say, hey, let's maybe see if we can get a cheap flight and i dunno, maybe stay at the hilton instead of the peninsula. prudence didn't enter into the equation. my friends and co-workers were less important than some washed-up corporate drone getting a good night's sleep on a useless marketing trip to london to get a project whose owners never bothered to sign a written contract.

that's not been my experience when the partners are in the pits, on the floor, working side-by-side with the rest of us.

Perhaps we should be discussing ways to make ourselves more valuable to our firms BEFORE things get bad, to avoid being seen as the "dead wood."

Can anyone cite examples of being able to do this successfully? It definitely takes a commitment beyond the 9-to-5-do-as-you're-told, wouldn't you agree?

ochona: $110m is a meaningless number, without some sense of the firm's size ... do you know the firm's annual gross revenues in 2000 ... or their total staff count that year ... with that information, $100m might be a big number or a relatively small number

while i have no desire to defend the behavior of SOM's "washed-up corporate drones" non-consultant reimbursable expenses typically, are a relative minor .. i repeat .. relatively minor part of a firm's cost structure ... reimbursable expenses typically would be on-the-order of 7-9% of gross revenues ...

staff payroll is the single largest component of any firm's cost structure ... compared to staff payroll, reimbursable expenses are relatively insignificant - especially since the vast majority of those expenses are going to be covered by clients ... any firm that bases staff decisions on the magnitude or efficiency of how they manage reimbursables simply is not paying attention to the factors that REALLY matter to a firm's economic viability

man ... you are one bitter son-of-a-gun !

- you are a very perceptive archinector - that's precisely why i started this thread - over the years, i've seen too many "emerging professionals" get sand-bagged when the downturn occurs - they never even saw it coming and it was very, very ugly

we currently are in a 'full employment' economy - while i'm hoping for the best, past history will suggest it won't last forever - if you're young, don't expect "current conditions" to be "the future" - this is just "the present" and there's no telling how long this will last

Thanks, comb.

Personally, I think that it is in everyone's best interest to find ways to keep themselves busy, preferably with billable work. A peer once recalled how her previous firm laid her off two weeks after she had finished a project because there was a lack of work available.

I'm by no means suggesting that we create busy-work for ourselves or take longer on tasks than we should. Rather, it's about taking-on more responsibility - but not too much as to be overwhelmed.

DCA: some advice that I got when I was a student - that seems to have worked thus far - was to try to stay working on as many current projects as possible in the firm and to stay away from things that don't keep you involved in the projects, billing hours, and moving upward. For example it's better both for your usefulness and profit to the firm and for your probable advancement in the firm if you are working on a bunch of CD sets on different active projects than if you lean more toward some of the things that sometimes appeal to interns but aren't billable or directly project-related, like writing CAD standards, designing the firm's website, becoming lord of the catalog library, or leaning toward being the office 3D guru. Interns often gravitate to those things because they can be interesting, they seem more high-profile, can sometimes give the intern more autonomy than working on CDs sometimes does, and they can be fun things, but also because they use skills that the intern may already have when hired, so the intern thinks he's being most useful that way. But those things aren't directly profitable to the firm, and they can keep you out of the bigger teams in the firm, so when someone has to go it may be you.
But if you want to keep your job and become indispensable then you want to learn that firm's individual ways of doing things as quickly as possible, get inextricably wrapped up in as many projects as possible, and learn as much about the technical aspects and construction methods of the projects as fast as you can, even if all of that means that you're doing some pretty unglamorous stuff sometimes.

there are two (maybe three) sure bets, when it comes to job security:

a) own a controlling interest in the firm
b) regularly bring in a ton of new work (which eventually will lead to a)
c) marry the son (daughter) of a) -- which also will lead to a)

these are not necessarily options open to most of us ... so, we each then have to figure out other ways to make a contribution at a level that makes our presence indispensible

there is one truism, however -- as one rises higher in a firm, job security begins to lose its close connection with income security -- in my experience, owners and key managers tend to find their own income, including base salary, more at risk when downturns occur than was the case when they were simply employees -- they also get the fun of dealing with loan guarantees as the downturn worsens

risk / reward ratio, baby !

there are two (maybe three) sure bets, when it comes to job security:

a) own a controlling interest in the firm
b) regularly bring in a ton of new work (which eventually will lead to a)
c) marry the son (daughter) of a) -- which also will lead to a)

these are not necessarily options open to most of us ... so, we each then have to figure out other ways to make a contribution at a level that makes our presence indispensible

there is one truism, however -- as one rises higher in a firm, job security begins to lose its close connection with income security -- in my experience, owners and key managers tend to find their own income, including base salary, more at risk when downturns occur than was the case when they were simply employees -- they also get the fun of dealing with loan guarantees as the downturn worsens

risk / reward ratio, baby !

ochona, if the firm bills the client for the first class flight and the client never pays the bill then the eventual write-off of the bad debt is really usually worth more to a firm of that size and level of billings than the savings for never having paid for the flight in the first place.

Very true, quizzical. It's unfortunate that architecture firms don't follow the federal government's "first in, first out" policy.

er... "last in, first out" policy.

?

sorry about that double post ... !

1.) sorry, i don't quite remember the revenue number. $110M in overdue fees was fees that were more than 180 days late. basically they were taking a charge on those fees. mind you there was still profit that quarter so.
2.) som's travel fees were so large they had an in-house travel agent.
but sure, count it as "the cost of doing business." however, many architects don't understand the value of decent management practices, one of which is morale reinforcement. people lose their livelihoods, but some partner gets to fully recline on his flight. am i supposed to buy in to this?
3.) were you up on the 10th floor in 2001 when one of the senior partners gave a speech on how "the dead wood" was all gone (this layoff occured one month after 9/11) but how "from now on you're all going to have to do more with less for less?"

all the more reason why it's better not to hire than to fire -- and why pay cuts are better than staff cuts.

... WOW ... wish i could get my partners on board with that idea ... this gravy train's not going to last forever and i'd really rather keep our staffing levels lowish and work a little harder now (and spread the wealth that produces) rather than staff up with untried people and run the very significant risk of forced staff reductions later on

- you state above "i would have made the staff aware that the office is facing hard times and that if things do not turn around, layoffs would be possible"

how would you guard against everybody jumping into panic mode and bailing out at the first opportunity - with probably the best people going first because they have the best opportunities

i think owners of firms have to walk a razor-sharp edge when conditions start to slide - on the one hand, they probably have a genuine interest in helping some folks see what might be coming - but, on the other hand, they have to keep morale up and maintain production capacity so existing work still gets done

i did my internship at a large commercial firm - during one of the down cycles, they laid off about 5 people every friday after lunch for about 6-7 weeks - by the third week, most of the professional staff could barely function on fridays - we thought it would never end - it was terrible - after 5 weeks, one guy actually went to the partners and asked to be laid-off - he simply couldn't stand the uncertainty any more

stone, i understand your concerns, but if you are apart an office that looks out for their employees, values them, and illustrates their worth and are apart of an office that promotes transparency, i don't think this is a problem. at least in my experience, this is not a problem. sure, if you are apart of an office like you describe for your internship, i understand how that would happen. you aren't valued. as someone said above, if you don't know the person you are firing, you are less concerned about them. the employee knows this too. they know their bosses don't care about them. trust goes both ways.

babs -- you hit the nail right on the head. this gravy train's not going to last forever and it's better to work more and save more in preparation for the inevitable downturn. which, judging by the rate at which my firm (for one) is having projects put on hold because of skyrocketing materials costs, is soon.

when the cost of an unchanged building goes up 20% -- in six months -- we are in trouble.

don't you just love the "feast or famine" nature of this business ?

Across the board layoff's for everybody!

'The Donald' aside, this is a very interesting thread.

In our area of the country, every design firm I know is extremely over-busy. Qualified staff is in very short supply and it looks to me that we're operating under a serious threat of over-building. I've been through this cycle several times before and I haven't been this nervous about the future in a long, long time.

Whether you believe in layoffs or pay cuts, you better start thinking about how you want to react when things start to slow down - you don't want to think about such stuff for the first time when you're under extreme pressure.