From USA TODAY, 9/18/03:
http://www.usatoday.com/money/economy/employment/2003-09-17-jobs_x.htm
Layoffs crank up again, chip away at economic growth
By Gary Strauss, USA TODAY
Rising corporate layoffs are beginning to undermine the nation's
economic recovery, labor experts and economists say.
Wednesday, R.J. Reynolds Tobacco announced it was slashing 2,600 jobs,
or about 40% of the No. 2 cigarette marketer's workforce.
The long-rumored purge is the latest in a string of post-Labor-Day
layoff announcements at technology companies and manufacturers that
will eliminate thousands of jobs.
Also Wednesday, Sprint, the USA's fourth-largest long-distance
carrier, said job cuts would likely be part of a three-year plan to
save more than $3 billion.
And Corvis, a one-time highflying telecom equipment vendor, said that
it would eliminate 200 jobs, or 14% of its workforce.
"The job market seems to be listing again, and without job growth, the
recent rebound in the economy isn't sustainable," says Mark Zandi,
chief economist at Economy.com.
While more precise September job layoff statistics won't be known for
weeks, more job cuts loom, reversing a four-month string of shrinking
layoffs.
Historically, job cuts are the largest in the fourth quarter as
financially strapped companies scramble to meet full-year projections,
says John Challenger, CEO of outplacement specialist Challenger Gray &
Christmas.
SBC Communications, the USA's No. 2 local phone company, said last
week that its workforce would continue to shrink because of lower
demand and cost-cutting efforts.
Thousands of job cuts are expected at Big Three automakers Ford,
General Motors and DaimlerChrysler.
The United Auto Workers has already agreed to unspecified cuts under
tentative labor agreements with Ford and DaimlerChrysler and is
negotiating a new deal with GM.
The automakers continue to face declining profits and market share.
"There are still great pressures on companies to cut losses and
costs," Challenger says.
"Many blue- and white-collar jobs are being globalized. That means
languishing job growth" in the USA.
R.J. Reynolds says its job cuts -- including up to 1,700 of 4,200
employed in Winston-Salem, N.C., -- are part of a plan to cut $1
billion in expenses by 2005, says spokeswoman Jan Smith.
Economists have characterized the economic recovery as a jobless
expansion.
But if job growth doesn't rebound soon, consumer confidence is likely
to slide.
"The economy will falter again if we don't have a better job market,"
Zandi says.
"Tax cuts and mortgage borrowings can only work so far."
Others say layoffs are simply here to stay.
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Pretty bleak picture, wouldn't you say?
Harry
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