Human Capital & Careers

Job Market Goes from Bad to Worse

December layoffs outpaced forecasts, and the carnage continued last week.
Stephen TaubFebruary 6, 2009

The jobs picture is not only growing uglier by the week, it is worsening more than experts have been anticipating.

The Labor Department reported Friday that 598,000 nonfarm jobs were lost in January and that the unemployment rate surged to 7.6 percent, up from 7.2 percent at the end of December. Both numbers were worse than the consensus forecast. The negative surprise comes one day after new claims for unemployment insurance came in higher than expected.

In the past week, the biggest layoff was at Macy’s, which said it will cut 7,000 jobs, or about 4 percent of its workforce, from offices, stores, and other facilities. Nearly 40 percent of executive jobs are being eliminated. Some of the reduction will come from eliminating unfilled positions.

PNC Financial Services Group, which acquired National City Corp. on December 31, said it will get rid of about 5,800 positions across its combined 59,595 employee base by 2011. This is part of a comprehensive two-year integration plan, with a goal of eliminating $1.2 billion of annualized expenses, the company said.

Airplane maker Hawker Beechcraft Corp. told employees it will eliminate 2,300 jobs, according to the Associated Press, citing a letter sent to workers.

Estee Lauder Cos. said that in the next two years it will reduce head count by about 2,000 employees, or 6 percent of the workforce. It also will institute an immediate companywide freeze on merit raises and continue its current hiring freeze. The reductions are to occur through a combination of normal attrition, reorganizations, and job eliminations.

Title insurer Fidelity National Financial Inc. said it cut 1,500 jobs related to an acquisition.

Time Warner Cable Inc. said it is laying off 1,250 people in the next few weeks, according to the AP.

Large layoffs are also taking place outside the United States: for example, in Japan Panasonic Corp. said it will cut about 15,000 jobs, while Sharp Corp. said it plans to let 1,500 contract workers in Japan go by the end of March.

Meanwhile, a number of smaller companies announced sizable layoffs.

Liz Claiborne is eliminating about 725 positions, or 8 percent of its U.S. workforce.

Video-game software maker THQ said it expects to reduce planned fiscal 2010 spending by $220 million and head count by approximately 600 people, or 24 percent of its workforce. “Our focus for next fiscal year is to return to profitability and to generate cash,” said Brian Farrell, the company’s president and CEO.

Specialty retailer Talbots Inc. announced a reduction of about 370 corporate-level positions, representing 17 percent of its corporate head count. The company expects the cuts to save about $22 million in fiscal 2009. It also said “continued rationalization of the hourly workforce in its stores and call center” are expected to result in $23 million in savings in fiscal 2009. In addition, the retailer said it would suspend its matching contributions to the 401(k) plan and increase employee health-care contributions.