The public and the press usually measure unemployment one month at a time as data from ADP and the federal government are issued. The jobs market can also be tracked in another way. Mass layoffs occurring over very brief periods are a sign of how corporations and governments view the financial world.
In the past few days, firings have neared a recent peak among some of the largest companies in the U.S. One troubling sign is that the layoffs are happening across a wide number of industries. The “downsizings” could be a coincidence, or they may be a signal that growth has slowed in several sectors of the economy.
Novartis (NYSE: NVS), the drug giant, said it will fire 1,960 people in the U.S. New product introductions have slowed. Some current products have sales difficulties. But part of the problem is that revenue is off and the company does not see that recovering enough soon.
Layoffs at U.S. financial firms may reach as high as 60,000 this year. Most recently, RBS (NYSE: RBS) said it will cut 3,000 people. Many more cuts may be in the offing. Apparently the government has asked Bank of America (NYSE: BAC) to set a plan to pull out of a number of markets across the U.S. That cannot be done effectively without personnel cuts.
AMR, the parent of American Airlines, may be bought out by Delta (NYSE: DAL) or US Air (NYSE: LCC). News reports say that a deal will remain on hold as AMR eliminates a number of jobs while in Chapter 11, so that the costs to run the airline are lower.
Delhaize said it will shutter 113 of its Food Lion stores and cut 4,900 jobs in the U.S. In the general retail sector, Sears Holdings (NASDAQ: SHLD) is in the midst of closing 100 stores, and the layoffs done in the process will number in the thousands.
The press has reported that layoffs are imminent at Yahoo! (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT) as each tries to control margins while revenue growth slows.
And public sector firings continue, as well. More than 1,500 people on the Oakland, Calif., payroll have been “let go.”
Once again, all of this news could be a coincidence — thousands and thousand of people just got unlucky at the same time. That really is not the case, though. Most of the companies and public employers that have cut people, or are about to, are in financial trouble arising from problems linked to the economy.
Douglas A. McIntyre
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