Various sectors across the world are slipping deeper and deeper into recession in what is turning out to be the worst economic crisis in more than 30 years. Around 80,000 job cuts were announced on Monday alone!
Various sectors across the world are slipping deeper and deeper into recession in what is turning out to be the worst economic crisis in more than 30 years. Around 80,000 job cuts were announced on Monday alone!
u00a0u00a0 About six companies including Fortune 500 companies like Pfizer, Caterpillar, Texas Instruments, Philips among others announced cost-cutting initiatives that comprises axing thousands of jobs.u00a0
Santosh, in his blog explains, "Construction machinery manufacturer Caterpillar, pharma major Pfizer, telecom firm Sprint Nextel and home improvement retailer Home Depot together accounted for 61,000 lay-off announcements."
The global job losses represent yet another evidence that the financial crisis that erupted on Wall Street has now infected the whole of the corporate world, engulfing industries ranging from health care to heavy equipment makers. Dutch banking and insurance group ING said it would slash 7,000 jobs, while another Dutch company Philips announced 6,000 job losses. The electronics major has 2,500 workers in the UK. Britain's largest steelmaker Corus had said it would cut 3,500 jobs from its global workforce, with more than 2,500 of them in the UK, he elucidates.
u00a0u00a0 Ali Velshi, CNN's chief business correspondent, in his blog says,u00a0"Job cuts are nothing new with the economy being what it is. Just look at the 2.6 million jobs lost in 2008. But, this week started off with a real bruising. On Monday alone, a bunch of big companies announced job cuts totaling 71,400 u2014 all in one day! If we go by company reports, more than 200,000 job cuts have been announced so far this year u2014 and we're only approaching February!"
u00a0 According to him, a survey of private-sector economists shows that 52 percent of their companies saw drops in profit margins in the fourth quarter, while 44 percent were forced to cut payrolls in the same period. As more company earning reports come out, expect more job cuts to be announced.u00a0 Employers are uncertain about where the economy is going. As bad as things are now, company executives and managers don't know if this economy has hit rock bottom. So, they will continue to cut costs as much as possible.
u00a0 "It's important to understand there is a very clear cycle going on here: consumers are spending less these days, so companies are making less money. That forces them to cut costs, resulting in job losses, which in turn cause consumers to spend less. And so the cycle continues. There are remedies in the works, like President Barack Obama's proposed stimulus package. He is hoping to create up to four million jobs by investing heavily in infrastructure projects," he says.
u00a0u00a0 Bondad has a different take on the developments. He, in his blog, says, "My theory is we're seeing the worst of the job losses right now. As companies report their fourth quarter earnings they are getting these cuts out of the way to simply get it over with. My hope is this bleeding will stop by mid-way through the second quarter."
u00a0 Peter Cohan says, "It may be some time before it exhausts itself. In the meantime, people are cutting back on spending as they anticipate the axe. That will just make the cuts deeper and sooner. But it can't be stopped."u00a0
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