Tags: employment

No Quick End in Sight to Worsening U.S. Job Cuts

Friday, 05 Dec 2008 01:42 PM

The United States experienced its sharpest drop in employment in more than three decades last month, and there is no end in slight to the bloodletting as corporations search for ways to cut costs, executives said.

The news that American employers had shed far more workers than expected last month -- cuts made even before this week's confirmation that the nation has been in recession for a year -- drove down stocks in the United States.

"This clearly demonstrates that the decline is accelerating," said Tig Gilliam, chief executive of North American operations for Adecco SA, the world's biggest staffing firm. "It looked midyear like maybe things would get a little bit better, and now the numbers are just dropping dramatically."

The Labor Department said U.S. nonfarm employers dropped 533,000 workers in November, a steeper fall than the 340,000 decline that economists surveyed by Reuters had expected. It marked the biggest tumble since December 1974 and means the economy has lost some 1.9 million jobs this year.

The cutting continued on Friday, with U.S. companies including General Motors Corp, asset manager Legg Mason Inc, auto parts supplier Gentex Corp, BMC Software Inc and Sonoco Products Co announcing new layoffs.

Earlier this week, such blue-chip companies as AT&T Inc , DuPont Co, United Technologies Corp and General Electric Co said they planned to shed workers as they look for ways to cut their costs.

The range of companies cutting jobs shows the economic contagion that started with the collapse of the U.S. subprime mortgage market, went on to knock the legs out from under the nation's home prices and sparked a global credit crunch is hammering all sectors of the economy.

BLEAK DECEMBER

As Americans prepare for Christmas, typically a season of spending as shoppers buy presents and entertain, more working people may be facing the bleak prospect of holiday unemployment as corporations make cuts before closing their year-end books.

"It's hard to gauge where the bottom is," said Sheldon Schur, vice president at Manpower Inc, the world's No. 2 staffing company. "It will be interesting to see what happens in the first quarter, because December will be another large job-loss month. We're going to see a lot of employers continue to shed to position themselves for 2009. And the bigger question will be what happens in January and February."

Even Americans who feel secure in their own jobs are growing increasingly worried about the deepening downturn.

"I'm very stressed," said Janet Segal, 53, who works for a Boston consulting firm. "I think that I'm OK at work right now, but my husband is an attorney for a Boston law firm and he's getting very worried. We just learned yesterday that they had laid one person off."

She said that her husband had planned to work at least three more years, until he turned 65, and fears that he would not be able to find another job if he lost his current position -- not an appealing proposition at a time when her 401(k) retirement investment account is down 30 percent.

"We're pretty frugal, but we'll have to find ways to be more frugal," Segal said.

The spreading layoffs are having a chilling effect on consumer sentiment, threatening to further throttle back spending, which will ripple across an economy that is heavily dependent on consumers.

Roger Hammons, a 42-year-old accountant, said that even though he was not worried about his own job security, he is avoiding making big purchases.

"Overspending got us to where we are now," Hammons said.

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The United States experienced its sharpest drop in employment in more than three decades last month, and there is no end in slight to the bloodletting as corporations search for ways to cut costs, executives said.The news that American employers had shed far more workers...
employment
588
2008-42-05
Friday, 05 Dec 2008 01:42 PM
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