Human Capital & Careers

New Job Cuts Heighten Recession Fears

Citigroup lops 4,200 heads, but the layoffs have spread well beyond the wounded banking industry.
Stephen TaubJanuary 15, 2008

By now it’s not much of a surprise when banking organizations, still reeling from the subprime mortgage fiasco, announce layoffs, as Citigroup did Tuesday. But while that company’s latest round of job cuts was a big one — 4,200 employees, on top of the 17,000 made last spring — players in a variety of industries were singing the same sad song, further feeding fears of a recession.

U.K.-based EMI Group revealed that it plans to reduce worldwide headcount by 1,500 to 2,000, a bow to a fast-evolving landscape in the music business.

“We have spent a long time looking intensely at EMI and the problems faced by its Recorded Music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment,” said chairman Guy Hands.

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Nokia said it will discontinue the production of mobile devices in Germany by mid-2008 and move those operations to other, more cost-competitive sites in Europe. One casualty of the move: a reduction of about 2,300 employees.

In the United States, semiconductor equipment maker Applied Materials said it will eliminate about 1,000 jobs, or 7 percent of its total workforce. And retail giant Macy’s said it is bagging 271 positions in its Midwest region.

The job losses are not good news for the slumping economy. As more people become idle, there is a concern that consumer spending will slow down even further.

On Tuesday, the Commerce Department reported that retail sales, a big part of the country’s economic engine, fell 0.4 percent, the first decline in six months and worse than analysts had projected, according to marketwatch.com.

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