Many Laid-Off Executives Prepared Financially for Ax

Job security can be elusive at the top as well as the bottom of businesses these days--and executives apparently are hedging their bets accordingly. Two-thirds of West Coast executives who lost their jobs last year had saved more than six months’ take-home pay, according to a survey by a firm that helps layoff victims find work.

“Executives are aware in this age of downsizing and restructuring that they may lose their jobs through no fault of their own,” said William Ellermeyer, managing director of Lee Hecht Harrison’s Irvine office.

More than 200 laid-off executives from Seattle to San Diego responded to the survey. Most had earned from $76,000 to $100,000, though some were paid considerably more or less. Of those whose jobs were axed last year, 82% said savings and severance pay would tide them over until they found work. Only 10% borrowed money from their families, 9% took out loans, and 8% refinanced their homes.

The strong economy has definitely made job searches easier for canned executives, according to a survey by another outplacement firm, Challenger, Gray & Christmas.

Indeed, the pickings among salaried positions are so good that markedly fewer executives are choosing the riskier route of starting their own businesses, Challenger said. In the past year, the number of discharged managers and executives who opted to go into business for themselves fell by 60%, from 12.9% in the second quarter of 1996 to just 5.1% today.

The highest number of job seekers who started their own business was in 1989, when one in five did so during the onset of widespread corporate downsizings and reorganizations.

“Now that jobs are going begging in many industries, the vast majority of job seekers look at becoming an entrepreneur and ask, ‘Why gamble?’ ” said Challenger’s executive vice president, John A. Challenger.

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E. Scott Reckard covers workplace issues for The Times. He can be reached at (714) 966-7407 and at [email protected]