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5 LI businesses where layoffs are not an option

The beginning of the year spooked Sharon Newman, the chief executive of printing company Action Envelope in Lindenhurst. News about big layoffs seemed endless.

"It was emphasized over and over in everything you heard that the companies that survive will be the ones that downsize and hold on to their cash," Newman said. "And we started thinking maybe we should lay off."

After some thought, though, she opted to stick with the 38-year-old company's tradition of avoiding layoffs. That strategy has placed Action Envelope in ranks that have become decidedly rarer during this recession: Companies that have never laid off employees.

In fact, massive job losses have helped define the current recession as the worst in a generation. Companies ranging from Macy's to Microsoft have announced plans to cut thousands of jobs. Major Long Island employers, including Arrow Electronics and Audiovox, also have announced layoffs.

But some local companies like Newman's have bucked that trend. They are mostly small businesses that prize their loyal and stable workforce. For them, layoffs are an option to try to keep off the table when scouring for ways to cut costs.

Still, Newman acknowledged that the recession has affected her business.

"If we are 10 percent down [over] last year, we will be content with that," said Newman, who has 35 employees. "I am not going to ruin people's lives over that kind of loss."

To avoid layoffs during the 1990-91 recession, she cut back the workweek of three pressroom employees from five days to four. This time she has cut back on the number of uniforms press employees use and the amount of coffee ordered for the office.

"There are a lot of places that you can cut before sending people to unemployment, and that is what we are trying to do," she said. "I think it's more important for us to think of creative ways to grow our business . . . "

Not panicking If ever a company had a reason to panic in this downturn, it's the 23-year-old Alcott Group, a Farmingdale human resources firm that provides payroll and other services to businesses. After sales rose for 20 years, they were flat in 2008, said co-founder and president Louis Basso.

In this environment, though he said, "Being flat is the new growth."

Since the company is private, he has breathing room, he added.

"We do projections and try to meet those projections, but we don't get hysterical if there is a bad quarter," said Basso, who has 50 employees.

The not-running-with-the-herd strategy helped the company grow through the recessions of the early 1990s and 2001, he said. Basso sees recessions as opportunities to spend money to bring in more business, and that means holding on to employees.

"Your employees are your most valuable resources . . . to get continuity with your customers," he said.

Layoffs are fairly new Layoffs weren't always a popular business strategy to cut costs. In fact, they didn't gain popularity until the 1980s, when stiff competition heightened companies' concerns about their finances.

Corporations became "much more focused on their short-term bottom line," said Steven Kyle, professor of applied economics at Cornell University in Ithaca. "So they are much less willing to carry workers they don't strictly need."

But downsizings carry risks. Some laid-off employees could entice former co-workers or clients to join them, said Linda Berke, president of Taylor Performance Solutions, a Melville training and consulting company.

And, she added, "there's always a possibility that they could spread negative comments about you."

Pushed to the wall? Some small-business owners who have resisted layoffs acknowledged that they sometimes may be justified - but in extreme cases.

"Unless a company is pushed to the wall and they have to do it so the company can survive," said Newman of Action Envelope, "I don't think it's right."

One of the secrets to no layoffs is no hiring binges, according to John Sullivan, executive vice president at Delta Computer Group, a 19- year-old Farmingdale tech-support and computer maintenance company.

"We've always run the business by the bottom line to make sure there is enough revenue to support the people we have in place," he said.

The company, which has 110 employees, grew during the last recession, he said, as corporations outsourced to smaller businesses like his. Though business is slow, Sullivan said he wants to be well-positioned when a rebound occurs. That means holding on to employees, he said.

"You don't want to lose that talent level," he said.

Advantage Payroll in Freeport has never laid off, either. In fact, it recently hired two salespeople, said its president, Robert Basso, who founded the company in 1996. (He is not related to Louis Basso.)

The company, which has 27 employees, posted double-digit growth in the last recession. And while business has slowed, Basso still adheres to the business model of going after new business in a recession and retaining staff.

"I would rather talk to people about reducing pay to keep the full staff," he said. Layoffs are "a blow to morale within a company."


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