Whatever recovery the jobs market posted in 2012, mass layoffs remained impressively high. Dozens of companies each fired thousands of workers, with failing firms at the top of the list based on total cuts.
Hewlett-Packard Co. (NYSE: HPQ), which is so badly off that investors now question its viability, fired 27,000 people in May. That number could rise rapidly as some of its core tech divisions struggle for sales. The botched buyout of Autonomy almost certainly will cause more job cuts in that division, which has, according to HP, much lower profits than forecast. CEO Meg Whitman has said HP sales may not improve for two years or more.
Hostess moved into Chapter 11 so quickly that the public only watched the process in its late stages, when it became clear that Twinkies might disappear. Friction between management and labor did not improve during negotiations, and 18,500 people lost work.
From tech to food to travel: AMR, the parent of American Airlines, also in Chapter 11, fired 13,000 people as the company attempted to show it can be profitable. The actions were part of a plan to emerge from bankruptcy either as an independent or an attractive target for another large carrier. Those plans have come to fruition. US Airways Group Inc. (NYSE: LCC) probably will buy American. A new consolidation between the airlines will cause another round of jobs cuts.
Showing that large layoffs were not concentrated in one sector or two, Citigroup Inc. (NYSE: C) cut 11,000 people. Its board of directors apparently did not think those cuts were enough. It fired CEO Vikram Pandit and replaced him with cost-cutting expert Michael Corbat. The new chief executive is expected to set another round of “downsizing” as he shutters underperforming divisions and tries to improve mediocre profits.
The snack and soft drink industry was the source of more job cuts. PepsiC0 Inc. (NYSE: PEP), which has battled slow sales of its flagship drink, cut 8,700 jobs. They may have been sacrificed as CEO Indra Krishnamurthy Nooyi effectively saved her job after Wall St. pressure to bolster the company’s share price.
Two of the nation’s weakest retailers cut jobs, and those cuts probably have not ended. Regional grocery chain Food Lion fired 4,900 people. That company has about 1,200 stores. And J.C. Penney Co. Inc. (NYSE: JCP), the most troubled major retailer in the United States, cut 4,700 people as well-paid CEO Ron Johnson made decisions that pressured revenue down by 20%.
Most of the companies that laid people off have at least two things in common. They have been run by CEOs who lost jobs amid pressure to improve results, or they are run by chief executives who could be ousted soon for the same reason. Also, they are companies where future cuts are nearly certain.
Douglas A. McIntyre