More Layoffs Announced—Is Your Firm On the List?
A major US retailer announced job cuts Monday amid worries about the fate of the stimulus plan, while a big Wall Street firm has further job cuts in store, according to reports.
Shares of Macy's dove about 12 percent as the merchant became February's first major US-listed firm to announce layoffs—7,000 jobs in total.
Meanwhile, Morgan Stanley may be announcing job cuts that total between 1,500 to 1,880 positions, or about 3 percent to 4 percent of the investment bank's work force, according to reports. Morgan Stanley had no comment.
The number of people receiving unemployment benefits has reached an all-time record this week and more layoffs are spreading throughout the economy.
The Labor Department reported on Thursday that the number of Americans continuing to claim unemployment insurance for the week ending Jan. 17 was a seasonally adjusted 4.78 million, the highest on records dating back to 1967. That's an increase of 159,000 from the previous week and worse than economists' expectations of 4.65 million.
As a proportion of the work force, the tally of unemployment benefit recipients is the highest since August 1983, a department analyst said.
The record number of ongoing benefit claims is an indication that laid-off workers are having a difficult time finding new jobs, economists said.
"This highlights the key point that the trend in gross hirings has slowed as abruptly as the trend in gross firings ... has risen," Ian Shepherdson, chief U.S. economist for High Frequency Economics, wrote in a research note.
A year ago, continuing claims stood at about 2.7 million, less than half their current level when the extended unemployment program is included.
Abiel Reinhart, an economic analyst at JPMorgan Chase, said the report indicatesthe unemployment rate likely rose this month. January's figure will be released Feb. 6.
The crush of new and continuing claims has overwhelmed many states' ability to process them all. Electronic filing systems crashed in three states earlier this month, and last week Michigan said it would hire 276 workers and open a fourth call center to handle increased phone traffic.
President Barack Obama's $819 billion economic stimulus package, approved by the House Wednesday and now on its way to the Senate, would provide $500 million to the states to upgrade their unemployment insurance systems. The measure also continues the extended unemployment compensation program, which adds up to 33 weeks of benefits, until the end of the year.
Here is a rundown of corporate job cuts announced so far this year:
- The 7,000 job cuts at Macy's account for 4 percent of the company's work force. In additioni to the job cuts, the retailer said it is cutting the 401(k) contribution it provides to existing employees. Also hurting Macy's shares was a dividend cut, to 5 cents per share from 13.5 cents.
- Morgan Stanley plans to cut about 3 to 4 percent of its work force, or up to 1,880 people, as it battles with spiraling costs and slowing business, according to people familiar with the matter. This wave of layoffs comes in addition to 7,000 layoffs the firm announced in 2008.
- Caterpillar said it was laying off an additional 2,110 workers as the company scrambles to cope with a downturn in demand for its construction and mining equipment.
- Walt Disney's television division is cutting 400 jobs, or about 6 percent of the unit's work force, due to the slumping economy.
- Strattec Security announced it will cut back on its production work force and cut its salaried work force by 10 percent. Twenty salaried workers were let go, while 66 production workers, or about one-third of the Glendale factory's work force, are on temporary layoff.
- Electronics giant NEC said it will cut 20,000 workers worldwide to stanch mounting losses, joining a slew of other Japanese corporate heavyweights who are slashing jobs to survive the deepening global downturn.
- Cessna Aircraftissued 60-day layoff notices to thousands of Wichita workers, saying job cuts must go deeper than previously expected. Cessna plans to cut employment by about 30 percent—approximately 4,600 companywide.That number has mushroomed since Cessna first announced it would eliminate 665 jobs in November. In early January, Cessna said it would cut an additional 2,000 jobs.
Eastman Kodak posted an unexpected quarterly loss and said it would cut up to 4,500 jobs this yearafter suffering a dramatic decline in demand for digital cameras and commercial printing equipment.
- British drugmaker AstraZeneca posted lower fourth-quarter net income, announced 6,000 further job cuts and issued a cautious 2009 sales outlook.
- Northbrook-based Allstate said that it plans to cut about 1,000 jobs in its financial arm through a combination of attrition and job cuts over the next two years.
- Oshkosh said it was cutting its workforce by 7 percentand withdrawing its 2009 earnings forecast. The company said it was also cutting production and closing a number of facilities. Over the past year, Oshkosh has laid off about 2,400 of its 14,200 workers.
- Tool maker Black & Decker said it would cut about 1,200 jobsto curb costs while battling a further fall in demand in most of its markets in 2009.
- Ford Motor Credit, the lending and financing arm of Ford Motor , will cut about 20 percent of its U.S. staff, or about 1,200 jobs, as part of a restructuring plan announced in meetings with employees.
The Employment Gloom Continues...
- Top U.S. specialty electronics chain Best Buy said about 500 of its workers accepted the voluntary exit packages.
- Time Warner's AOL will cut about 700 jobs, or 10 percent of its workforce, as it copes with an advertising slump, in a move that could make the slimmed-down company more attractive to possible merger partners.
- General Motors plans to end its controversial jobs bank program, which paid UAW workers who were not working. Chrysler ended its jobs bank program earlier this week. The 1,600 UAW workers in GM's jobs bank will be placed on layoff and must apply for unemployment benefits.
- Business-software company SAP said it would lay off 3,000 people in 2009, or nearly 6 percent of its global work force.
Retailer Pacific Sunwear said it is eliminating 47 positions at its headquarters and 10 field management positions. The move, which is aimed at lowering expenses, will reduce its headquarters and field management staff by about 11 percent.
- Starbucks will cut 6,000 positions as it closes 300 stores worldwideover the next eight months and will eliminate about 700 non-store workers by mid-February as it cuts costs to stem its eroding profits.
- TheReader's Digest Association is cutting about 280 jobs, or 8 percent, of its staff as it tries to strengthen itself against the world financial crisis. It also will stop matching contributions to U.S. employees' 401(k) retirement plans.
- Boeing announced plans to lay off an additional 10,000 employees, about 6 percent of Boeing's workforce, as it braces for a global slowdown certain to hurt aircraft sales. The latest job cuts, which include the 4,500 workers Boeing had previously said it would eliminate, came as the aerospace manufacturer reported a huge fourth-quarter loss.
- Target said it will cut roughly 600 jobs at its headquarters, leave another 400 positions unfilled and close a distribution center that employs 500 workers as it contends with weaker-than-expected sales.
- Oilfield-services provider Baker Hughes announced plans to cut about 4 percent of its work force, or about 1,500 employees.
The Employment Gloom Continues...
Corning posted weaker-than-expected quarterly results and outlook due to a significant decline in demand for glass for televisions and computer monitors, and said it would eliminate up to 4,900 jobs to cut costs.
- Swiss specialty chemicals company Clariantsaid it was axing 1,000 jobsto cut costs and could shed more staff this year after it posted a 5 percent drop in full-year sales.
- Texas Instruments posted a smaller-than-expected drop in quarterly profit, but said it may post a loss in the current quarter and announced a 12 percent cut in jobs, as demand for cell phone chips fell.
- Pfizer said it is buying rival Wyeth for $68 billion in a deal that will quickly boost Pfizer's revenue and diversification.The deal came as Pfizer set out a list of issues: a 90 percent drop in income, a hefty charge to end an investigation, a severe cut in its dividend, a shockingly low profit forecast for 2009 and 8,000 job cuts starting immediately. Additionally, Pfizer also plans by 2011 to cut about 8,190 jobs, 10 percent of its workforce, as part of what it expects will be a staff reduction totaling 15 percent of the combined companies' workers—implying a total job loss of almost 20,000.
- Apparel maker Quiksilver said it will slash 200 jobsto cut costs in a worsening retail environment.
- General Motors announced it is laying off 2,000 workers in Ohio and Michigan and plans to schedule extra down time at 14 plants.
Caterpillar , the world's largest maker of construction and mining machines, which also reported lower-than expected fourth-quarter earnings, said it is laying off 17,000 workers, and buying out 2,500 others to reduce costs.
Sprint Nextel , the No. 3 U.S. mobile service provider, will cut up to 8,000 jobs, or about 14 percent of its workforce, as part of a plan to reduce labor costs by $1.2 billion a year.
- Home Depot plans to eliminate 7,000 jobs while closing four dozen stores under its smaller home improvement brands as the recession continues to batter the nation's housing market. Its shares climbed more than 5 percent in morning trading.
- Writedowns of more than 1 billion euros pushed Philips Electronics deep into the red in the fourth quarter, and it will cut 6,000 jobsto cope with a steep downturn that has hurt its consumer business.
The Employment Gloom Continues...
- Farm-equipment maker Deeresays it will lay off almost 700 workers at factories in Brazil and Iowa.
- U.S. chemical maker Huntsman said it plans to cut about 1,175 jobs, or about 9 percent of its workforce, by year-end to reduce costs and tackle the huge slump in chemical demand.
- Microsoft announced it would cut up to 5,000 jobsand said it could no longer offer profit forecasts for the rest of the fiscal year.
- Intel said it would close sites in Asia and scale back operations in the United States as part of a restructuring that could affect as many as 6,000 jobs.
- UAL announced it will further reduce the number of salaried and management employees by approximately 1,000 positions by the end of 2009. This is in addition to the 1,500 positions the company announced in the second quarter.
- Diversified U.S. manufacturer Eaton said it planned to cut 5,200 jobs, or about 6 percent of its work force, in an effort to further slash costs in the face of a struggling economy.
- Time Warner's Warner Bros. Entertainment said it would cut about 800 jobs, or 10 percent of its worldwide staff in coming weeks.
- Lee Enterprises , which publishes 49 daily newspapers including the St. Louis Post-Dispatch, said its quarterly profit on a preliminary basis fell 69 percent and cut its staffing by more than 10 percent.
- Rohm and Haas said it plans to cut 900 jobs, or 5.5 percent of its workforce, in a bid to tackle the slump in demand and widespread market weakness.
- Bank of America may slash as much as 4,000 jobs in its capital markets units starting this week. The cuts are expected to be in New York and reflect the consolidation of the bank’s sales and trading businesses after it bought Merrill Lynch three weeks ago.