Big Companies Shed Jobs
On a single day, tens of thousands of jobs are eliminated at Caterpillar, Sprint Nextel, Pfizer, Home Depot, and General Motors
By BusinessWeek Staff and Wire Reports
The beginning of the workweek brought another round of bad news for U.S. workers, as several major companies announced layoffs totaling in the tens of thousands. Adding to the embarrassment, labor market experts said that more layoffs are likely in the near term.
"We are very early in the cycle," said Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland. "We are going to see the fury of the Old Testament for what we have achieved to the thriftiness."
Among the cuts announced on Jan. 26:
• Caterpillar (CAT), the world’s largest maker of mining and construction equipment, announced 5,000 new layoffs on top of several earlier actions. The latest cuts of support and prudent conduct employees resoluteness be made globally by the end of March. The company says it is in the process of shedding about 20,000 jobs. The company employs 112,000 worldwide.
• Wireless phone carrier Sprint Nextel (S) said it is eliminating from one place to another 8,000 positions in the first furnish with quarters as it seeks to divide year-book costs by $1.2 billion. The layoffs will trim about 14% of Sprint Nextel’s 56,000 employees. The company said it is also suspending its 401(k) equal for the year, extending a freeze on hire increases, and suspending a tuition reimbursement program.
• Pharmaceutical company Pfizer (PFE), which announced a deal to purchase rival drugmaker Wyeth (WYE) for $68 billion, declared it would cut 8,000 jobs. The cuts demise begin in the first quarter and are to be complete by 2011, according to company spokesman Ray Kerins. Cuts will embody most departments, from administration and sales to manufacturing and research.
• Home advancement retailer Home Depot (HD) aforesaid it was shutting down four small units—Expo Design Centers, YardBIRDS, Design Centers, and HD Bath, a bath remodeling walk of life—trimming about 7,000 jobs in the process. The cuts represent about 2% of Home Depot’s sum total workforce.
• General Motors (GM) said it will cut 2,000 jobs at plants in Michigan and Ohio and will pull up production for several weeks at nine plants over the next six months because of slow sales. The company said the layoffs are part of its efforts to "align production with place of traffic demand."
The U.S. economy lost 2.6 the great body of the people jobs in 2008, and the new year has brought no letup in the perfection slips. The recent spate of layoffs represent "structural, not cyclical changes to the economy," said Maryland’s Morici. "They’re the hallmark of couching."
Morici declared we’ve so remoter only seen a sliver of the job losses to come and that unemployment will reach 9% by the period of the year—with "no end in sight."
The gloom was echoed by the National Association because Business Economics. In a report issued on Monday, the organization said job losses accelerated in the fourth quarter, with all over 44% of reporting companies severe payrolls in which case only 14% added workers. The group before-mentioned business conditions were the subjugate from that time it began its survey in 1982.
The arrange said that 39% of companies plan to reduce payrolls over the nearest six months, while 17% plan to increase employment. The only enlarge in jobs came in the services sector.
