Five major U.S. companies announced massive job cuts on Monday morning. The companies all cited the global downturn as the reason for the layoffs. In total, the layoffs will account for 45,000 jobs.
The following U.S. companies announced layoffs today:
Caterpillar (equipment manufacturer) – 20,000 jobs
Sprint Nextel (telecommunications) – 8,000 jobs
Home Depot (home retail) – 7,000 jobs
General Motors (automobiles) – 2,000 jobs
Pfizer/Wyeth (pharmaceuticals) – 8,000 jobs (pending merger)
In addition, late last week, Microsoft announced that it will be engaging in layoffs for the first time in the company’s history. Outside of the United States, ING and Phillips, both based in the Netherlands, announced layoffs of thousands of workers today.
Currently, the U.S. unemployment rate stands at 7.2, but that number appears certain to rise in the coming months. Meanwhile, as we reported here, Barack Obama urged the American people to support his $825 Billion stimulus plan on Saturday, which he hopes will create up to 2.5 million jobs.
As reported in the Wall Street Journal, Caterpillar, which announced the deepest job cuts, lost over 30% of its revenue in the fourth quarter of 2008. It expects an additional 20% drop in 2009. The layoffs represent 18% of the company’s workforce.
As reported in Huffington Post, the Home Depot layoffs will mostly come from its Expo Chain, which it is closing over the next few months. The flagship Home Depot stores will remain fully operational.
The economy now appears to be sinking in all sectors at once, unlike in 2001, when technology and finance collapsed while the rest of the economy remained relatively strong. We have yet to see Great Depression-like numbers, but California, which usually leads economic trends, now has close to a 10% unemployment rate. If that number hits the rest of the country soon, expect Obama’s approval rating, which is currently normalizing, to drop like a rock.
January 26th, 2009 at 12:36 pm
Just when is Obama going to doing something other then sign Executive Orders. I thought we were in dire need of his package to stimulate us. When do we get the ones’ package. Will he with hold it until we reach 10 or 11?
I swear Chuck Schumer said this yesterday on TV. He said, “I have seen Obamas package and it is well balanced.”
He has no plan because he has no clue.
January 26th, 2009 at 1:18 pm
Well I think the messiah of Democrats is dead, but wait the democrats have Clinton, Pelosi, and Reid to keep there bad name which only people who are on welfare could like are there. I mean really I don’t want to see people out of work, but I want to see the Democrats fall. And there to be a next generation Ronald Reagan to become president.
George wait obama now is saying he wants his piece of crap stimulus for 2010.
January 26th, 2009 at 1:26 pm
This is why we elect Governors to Presidents. Not state senators or community organizers. Governors understand budgets and taxes and they are held accountable for whatever happens.
Obama has not a clue. He is so clueless he doesn’t even know where to go and buy a clue. I think you can buy used clues on ebay.
January 26th, 2009 at 2:45 pm
“I swear Chuck Schumer said this yesterday on TV. He said, “I have seen Obamas package and it is well balanced.â€? ”
really?
i thought most men’s packages were sort of bent to the right … let me think about this, because i am using facing him …
yeah, i am pretty sure most men are bent to the right (meaning my right)
January 26th, 2009 at 3:01 pm
Chucky said that and I had to rewind it to make sure that I heard him right. What a dufus. Do you have be a dufus and see the package to serve from New York?
Maybe you have never……never mind. LOL
January 26th, 2009 at 5:32 pm
Let the market fail. I’ve played by the rules. My mortgage’s paid off. I’ve saved all my life, and even though it’s worth less than half what it was a year ago, what the heck? I’ve got a 30-06 with a premium load, and a woodlot, a well and a garden and a roof that doesn’t leak. If the market fails, it won’t make it hard for me. What’ll be tough is shooting all the citizens leaving New York and Boston looking for food around here.
Hey, it’s America. The land of personal responsibility and opportunity. Let ‘em eat that cake now.
January 26th, 2009 at 6:54 pm
What is that, 45 people for every 200,000 employed? It’s a recession but this alone doesn’t even dent the unemployment rate. It’s normal business trimming.
January 26th, 2009 at 7:01 pm
It sure dents the employment rate if it’s your job.
January 26th, 2009 at 7:18 pm
Well of course, Brian, but that isn’t the point. Shall we bail out these companies as if we have never seen a recession before? Short memories. The Peter Lorre line from Casablanca seems to apply here.
Economic theory 1: the bigger the boom the bigger the bust.
Economic theory 2: recessions are normal and in fact desirable for long-run economic health.
Economic theory 3: the government is a poor distributor of good and services, and thus, stop looking to big brother for your bread.
January 26th, 2009 at 7:37 pm
Good points McCain. Like to clarify a little:
Theory 1. Volatility and uncertainty is one thing businesses don’t like. But you’re right. Wild swings are just that: wild swings.
Theory 2: Recessions are normal and desirable. Yes. Market corrections are indeed necessary. In this case however, the transparency necessary for markets to make good decisions, and the bundling investments to the point of complete obscurity thwarted the real working of the market. Or to put it another way, the market didn’t correctly assess the risks associated by obscurity and had it been able to do so by regulation requiring acceptable levels of transparency, then the recession would have been shallower. The market needs to be regulated.
Theory 3. Free markets are the best wealth generator, but distribution of wealth is a political matter. If we want, as we seem to do in America universal education or roads that serve everyone, then the market won’t provide that, for example. It’s not wanting bread from my big brother, but using big brother to provide those social goods that markets won’t provide. As another example, markets won’t provide national defense, but we agree that’s a necessary social good. We, politically have to decide that these social goods are.
And of course we can’t expect government to be as efficient as business. Imagine having two committees, one of 435 members and another of 100 members and one CEO to pull it all together. Pretty poor business model don’t yu think?