Human Capital & Careers

More Signs of Employment Plunge

Chrysler, Aon, and others jump on the layoff bandwagon.
Stephen TaubNovember 1, 2007

Corporate layoffs continued to proliferate this week, but are they enough to make the unemployment rate surge? It depends on what data you look at.

The Labor Department reported Thursday that the number of people who filed initial claims for unemployment benefits fell more than expected last week. In addition, the Associated Press reported that economists expect the September unemployment rate to remain at 4.7 percent when it is disclosed on Friday.

However, the four-week average of new claims for unemployment benefits rose to a six-month high.

A number of companies have recently announced major layoffs, creating a new pool of people who will apply for jobless benefits over the next few weeks.

On Thursday Chrysler announced that it will eliminate shifts at five North American assembly plants which, combined with other volume-related manufacturing actions, will lop off 8,500 to 10,000 hourly jobs through 2008. The company also will reduce salaried employment by 1,000 and contract employment by 37 percent. These actions are in addition to 13,000 jobs eliminated by the company’s three-year Recovery and Transformation Plan announced in February.

Also on Thursday, Aon said it will eliminate 2,700 jobs as part of a larger restructuring plan, and The Wall Street Journal reported that Fidelity Investments is expected to lay off 200 employees on that day.

Earlier this week, struggling Alcatel-Lucent said it would cut 4,000 jobs. The company previously announced 12,500 layoffs. And last week CFO.com reported that Novartis is shedding 1,260 jobs, General Motors 1,000, AOL 750, Amgen 675, GDX Automotive 800, and Interstate Brands 882.

These announcements come on the heels of a string of layoff announcements from a number of financial services giants.

About one month 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.

And if more companies like Merrill Lynch take big write-offs from mortgage- and other investment-related losses, you can be sure there will be many more people receiving pink slips over the next few weeks and months.

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