Human Capital & Careers

Companies Sharpen the Ax for Workers

Job cuts are surging, led by the mortgage lending industry.
Stephen TaubJanuary 11, 2008

As several economic indicators weakened last year, one critical measure mostly held firm: employment. But now even that is faltering.

The Labor Department has reported that the unemployment rate surged to 5 percent in December from 4.7 percent the previous month, and that government and private employers added the fewest new jobs in more than four years.

On Friday, The Washington Post reported that 7,000 jobs were lost in December in the credit-intermediation field, which includes mortgage lending and related activities. That followed 13,000 such job losses in November. The total number of jobs lost in that industry in now 79,000 after the peak reached last February. The paper also noted that the U.S. construction industry has lost 236,000 jobs since its peak in September 2006.

This week, a steady drumbeat of layoffs continued to haunt the economy.

The McGraw-Hill Cos. announced it will cut 600 jobs, or 3 percent of its global workforce. “Reducing staff is never an easy decision, but we believe the steps we have taken will strengthen our organization, enhance our ability to serve our customers, and maximize shareholder value,” says chairman and CEO Harold McGraw III.

Honeywell is cutting 240 jobs at its Phoenix facility in the next 18 months and moving most of them overseas, according to the Associated Press. They include 180 manufacturing jobs and 60 engineering jobs.

Engine maker Rolls-Royce says it will reduce worldwide employment by up to 2,300, including some jobs in the United States. At the end of November, the company employed approximately 8,300 in North America.

Also overseas, Thomson Financial reports that French car maker PSA Peugeot Citroen plans to announce 1,000 voluntary job cuts at five car plants in France, citing a report from Agence-France Presse.

Job cuts — as well as the prospects for job reductions — hurt consumer confidence in general. Indeed, on Friday the RBC Cash Index fell to its lowest level since it began in 2002. “Consumers are gloomy. The confidence reading suggests that people believe bad times are upon us,” Richard Yamarone, economist at Argus Research, told the AP.

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