Even as the recession cuts deeply into their revenue, some companies are opting to do the unconventional. They're keeping all their employees and finding other ways to trim costs.

Their strategy isn't about mercy. It's built on the notion that layoffs bring high costs and hassles of their own.

Profits at Costco Wholesale Corp. are down 27 percent from a year ago, but the discount store has not laid anyone off. The only workers let go have been holiday seasonal hires.

"They're thinking in the long run it will actually cost more to let people go, then have to bring them back and retrain them versus just retaining them," said Mark Knold, senior economist at the Utah Department of Workforce Services. "They obviously see this as a downturn that has an end to it and is probably not too far out, as far as they're concerned."

To trim costs, Costco imposed a hiring freeze at its corporate offices. But the company says it recognizes that labor remains its most valuable -- if costliest -- resource.

"We're certainly sharpening our pencil everywhere we can," said Bob Nelson, Costco's vice president of financial planning and investor relations. Nelson couldn't recall any layoffs at Costco since the closing of some stores in the 1980s.

Clearly, companies that have avoided layoffs are the exception, not the rule. Employers have cut 5.1 million jobs since the recession began, including 663,000 last month alone.

Economists say it's a wise move for some companies to keep their workers and cut elsewhere.

"If you overshoot on the downside and lay off workers, it puts the company at a disadvantage when the economy comes back to life," said Sean Snaith, economics professor at the University of Central Florida.

The other steps companies are taking to cut costs are not exactly harmless to workers. Chief among them are capping the number of hours employees can work, cutting or freezing pay and suspending matching payments to 401(k) plans.

A survey by job placement firm Challenger, Gray & Christmas this year found 71 percent of companies polled had laid off some workers. More than a quarter had implemented pay freezes or cuts.

Marvin Windows and Doors, a Minnesota company, hasn't laid off any of its 5,300 workers -- despite the collapse of the housing market. Its sales were flat in 2008 and have fallen this year.

"We can't easily replace skilled craftspeople and their decades of experience," said President Susan Marvin. Instead, the company has trimmed the time factory workers are on the clock -- from 40 hours a week to 32. It's a sacrifice David Peterson, who is 56 and has worked there for five years, is willing to make.

"You may have your hours cut, and that's not easy," said Peterson, who maintains machinery. "But you still have your job, which gives me a lot of peace of mind."

Layoffs typically mean companies have to pay severance costs, which vary widely by occupation and industry. A retail clerk might cost a company $1,000 in severance; a low-level white-collar manager paid $50,000 a year could get $5,000.

And higher-paid professionals who earn well into six figures -- accountants and lawyers -- could get $50,000 in severance, said Terry Connelly, dean of Golden Gate University's Ageno School of Business in San Francisco.

Other costs are harder to put a price tag on, including the loss of talent and leadership. Layoffs can drag down the morale of those who managed to survive the job cuts but fear they could be next.

And when it comes time to rehire, a company usually ends up paying new hires more than the laid-off worker got paid. That's because an improved job market gives workers more negotiating power than if they had remained at the company, Connelly said.