Pause and effect: Companies consider temporary layoffs
Companies and organizations in the state are struggling to balance budgets and offset a slowdown in orders, forcing them to consider temporary layoffs. Furloughs are a tried-and-true method of budget balancing, as evidenced by former Gov. John McKernan’s furlough of 10,000 state employees for two weeks in the summer of 1991. But while some executives are sending workers home, others are opting for alternative cost-cutting measures. Here’s a recap:
Earlier this month, Fraser Papers said it would furlough 140 hourly workers and an unspecified number of salaried workers at its East Millinocket mill for about a month. The Toronto-based company temporarily shut down its No. 5 paper machine for 28 days beginning Feb. 9, according to the Bangor Daily News. The mill employs about 491 hourly workers.
Only two weeks later, Fraser announced a second round of furloughs, this time at its paper mill in Madawaska. The company plans to send home as many as 600 workers in late February for up to two weeks because of a lack of confirmed orders, according to the Bangor Daily News. The company will idle four of the mill’s six paper machines and keep only 112 of its 712 employees working. Both decisions stem from the company’s new policy of better managing its cash flow by only running the machines when orders are in hand.
But officials at the University of Maine System decided not to pursue a furlough of more than 2,000 staff members, opting instead to cut costs in other ways. The system and labor groups representing the employees had tentatively agreed to lay off clerical staff for two days to save the system $1.2 million and spare the jobs of 100 clerical workers. But the system instituted other cost-cutting measures at six of its seven campuses and at the system level, making the furlough unnecessary, according to a joint statement from the system and employee representatives. The system faces a $15.1 million shortfall for its current budget, which ends June 30.
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