Reich Blasts GOP Tax Breaks for Companies That Slash Employees

WASHINGTON — Labor Secretary Robert B. Reich criticized Republicans in Congress for seeking to give tax breaks to companies without taking into consideration whether managers are keeping their employees.

Corporations’ efforts to shrink their work forces by firing employees hurt “many companies in the long term and on the economy as a whole,” Reich said at a forum on layoffs sponsored by Harper’s magazine.

While companies may see their costs fall and stock prices rise, Reich said, layoffs disrupt a “complex employee network.” The “asset base” of a company sits in its human resources, Reich said, so executives should treat their employees more like assets.

Reich’s comments come as companies have said they’ll cut workers. Kellogg Co. said this week it will close its cereal plant in San Leandro, Calif., by year’s end, eliminating 325 jobs. Software Publishing Corp. said it will let go 90 employees, or 45% of its work force, as part of an effort to return the company to profitability.

Chase Manhattan Corp. and Chemical Banking Corp., planning to merge, have announced they’ll cut 12,000 of the two banks’ 75,000 jobs as part of a drive to slash costs by $1.5 billion a year.

Companies that must cut back should consider attrition rather than firings or layoffs, Reich said. He also favors giving workers “a lower base pay with greater profit-sharing” opportunities as a way to promote loyalty in the workplace.