...and on the labor front:
Major layoffs seem on increase
Growing softness in job market seen, expert says
By Gary Strauss, USA TODAY
A rising number of companies are planning major layoffs.
But are the cuts fresh evidence of a slowing economy or isolated cases of
companies trying to boost earnings and appease Wall Street? Perhaps both,
economists say.
''Despite the concerns that the Federal Reserve has about shortages in the
workforce, companies are managing to get by with fewer people,'' says
economist Maria Fiorini Ramirez of MFR Forecast.
Claims for unemployment benefits surged to a seasonally adjusted 319,000 last
week, the highest in more than a year, mostly because of a rise in
autoworkers idled by annual plant shutdowns.
Meanwhile, the unemployment rate remains near a 30-year low.
Yet, combined with the spate of companies announcing layoffs across several
industries, there is a growing softness in the job market that appears to have
staying power, says Huntington National Bank economist Jim Coons.
Monday, Bank of America said it would consider sizable job cuts to boost
earnings. And Merrill Lynch reportedly is considering a similar move, although
officials would not comment on the report. Among companies announcing
layoffs this month:
Honeywell International, 6,000 jobs, or about 5% of its workforce, on top of
an earlier plan to eliminate 11,000 jobs.
Hush Puppies shoemaker Wolverine World Wide, 1,400 workers, or 25% of
its North and Central American workforce.
Medical products maker Boston Scientific, 1,900 workers, or about 8% of its
U.S. workforce.
Software maker Datastream Systems, 100 employees, or 10% of its U.S.
workforce.
Sony's Music Entertainment division, 500 employees, or 4% of its global
workforce.
The cuts come at a time when corporate downsizing had been at a three-year
low, says Jim Challenger of job consultant Challenger Gray & Christmas.
''We might be seeing signs that a turnaround is beginning to happen,'' he says.
''Whether the job cuts are handled at once or by attrition matters little. They're
saying they aren't going to refill those jobs, so they're still downsizing.''
Typically, companies put off layoffs until year's end. No longer. ''In the new
economy, it's done earlier. Why wait? Signal your workforce that if you want
to find a job, go ahead,'' says Rajeev Dhawan of UCLA Anderson Forecast.
Still, job growth is extremely strong for skilled machinists and those with
computer-related skills, Challenger says. That's even true for the Internet
sector, which has slashed 5,400 jobs this year.
Signs of a tight labor market remain, even at layoff-minded Boston Scientific.
It's taking an unusual approach of giving retention bonuses to those employees
who remain 12 to 18 months while it restructures and ultimately slims down. |
