Over the past several weeks, company layoffs have dominated the headlines as the economy has slowed. Consumers are not spending money like they were a year or two ago, and fewer customers mean smaller revenues and lower earnings for companies. When a company is faced with cost cutting decisions, the unfortunate reality is that wages and salaries sometimes need to be reduced. It used to be that the newest employees that were the first on the chopping block, but this recession is seeing a new group of employees at risk when layoffs are announced.

This recession is seeing older, more educated employees lose their jobs at much faster rates than in the past. While the total number of unemployed people has grown by 50% in the past year, the number of people 55 and older who have lost their jobs during that timeframe has jumped by more than 70%. People with college degrees were laid off at an even higher rate, showing an 85% increase over the past year. This is a trend that is very different from past economic slowdowns.

There are several reasons for these changes, but it appears that companies looking to cut substantial costs would rather cut one established worker than three newer employees. For instance, if your goal is to cut $300,000 in salaries, you could cut 2 middle managers making $150,000 each or 6 employees making $50,000 each. There are pros and cons to the approach of cutting more established workers, but more companies seem to be cutting the more mature and educated members of their workforce.

This should make the job hunt interesting for laid off workers with higher salary needs, many of whom have been in the same industry and with the same company for several years. The downturn in the stock markets has depleted funds in retirement accounts and caused many other seniors to enter the job market as well.

It’s important to remember that regardless of your experience level and tenure with a company, now is an important time to make an extra effort at work and make sure that you are a necessary part of your company’s future plans.

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Tags: layoffs, recession

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