Human Capital & Careers

Job Cuts Spread Beyond Financial Services

It’s the worst year ever for job losses at finance companies, but now it looks as if businesses across the board are joining in.
Stephen TaubOctober 23, 2007

Conjuring up memories of late 2000, when a sudden wave of job cuts turned out to be an early warning shot of the long recession that began early the next year, the past week has brought news of widespread layoffs cutting across numerous industries.

Companies trimming their work forces include the makers of drugs, Twinkies, and cars, among many others. Novartis is shedding 1,260 jobs, General Motors 1,000, AOL 750, Amgen 675, GDX Automotive 800, and Interstate Brands 882.

In total the announcements in the last week amounted to about 6,000 jobs lost — not a huge number, especially compared to the 133,713 that were cut in December 2000, according to outplacement firm Challenger, Gray & Christmas. But they came in rapid-fire manner and represented a cross-section of the economy.

The layoffs are also a reminder that the current mood of economic uncertainty is not just the result of the sub-prime mortgage crisis, which itself triggered a round of job eliminations earlier this month.

Just three weeks ago, UBS said it would cut about 1,500 jobs, or 7 percent of its investment banking work force. Credit Suisse said it would lay off 170 more employees, mostly in its New York mortgage-backed securities division. Morgan Stanley said it was planning to lay off 600 workers, Lehman is shedding more than 2,000 mortgage employees, and HSBC canned about 750 people from its subprime unit.

It’s no surprise, then, that Challenger, Gray declared 2007 as the worst year ever for layoffs in the U.S. financial-services industry. And the year is far from over. Already, finance companies have announced 130,000 job cuts this year, more than double the 50,000 in 2006 and even more than the record 116,000 in 2001, according to BusinessWeek.

Meanwhile, Intel earlier this month confirmed that it plans to cut 10 percent of its staff.