Thursday, December 04, 2008

AT&T, Dupont, and Credit Suisse slashing even more jobs

There is not much to say about this story, except that companies are continuing to slash even more thousands of jobs during this economic downturn. From the Washington Post:

Telecommunications giant AT&T said today it would lay off 12,000 employees in coming months, the latest shock to a labor market that has declined steadily for a year.

In a news release this morning the company said that "economic pressures, a changing business mix and a more streamlined organizational structure" would lead it to trim its workforce by about 4 percent, beginning this month.

The announcement from AT&T comes amid a steady wave of data showing a collapse in hiring. New claims for unemployment benefits remained above half a million last week, though at 509,000 represented a dip from the week before, while ongoing claims rose 89,000 to hit 4.09 million, the highest level since the recession of the early 1980s.

The government's latest monthly report on unemployment, due for release tomorrow, is expected to show November job losses in excess of 300,000.

Along with the AT&T layoffs announced this morning, Dupont said it would trim 2,500 workers involved in lines of business dependent on the slumping auto and housing industries.

In a sign of the slowdown's global reach, Credit Suisse, a major player in Switzerland's storied banking industry, said it would cut 5,300 jobs -- about 11 percent of its workforce -- after suffering losses of $2.5 billion over October and November.

The WaPost reports that according to ADP Employer Services monthly payroll survey, "payroll processors estimated that private businesses shed 250,000 jobs in November," the biggest drop in seven years. Based on the data from nearly 400,000 companies, the ADP report shows across-the-board declines in large, medium-sized, and small companies. The U.S. government's monthly jobs report is coming out tomorrow, and analysts are expecting another spike in unemployment, with job losses that could top 300,000.

The U.S. economy is contracting. Also from the Washington Post:

A separate study by the Institute for Supply Management showed that economic activity in the service sector fell to the lowest level since its index for the sector was first reported more than a decade ago. The ISM surveys businesses for information on hiring, new orders and other data that are formed into an overall index. A reading greater than 50 indicates a sector is expanding. The reading for November was 37.3, compared with 44.4 in October.

Even usually positive news -- a rise in worker productivity -- took on a dark hue. The value of hourly worker output increased by 1.3 percent from July through September, a larger increase than originally estimated, according to the Bureau of Labor Statistics. But that upward revision came only because employers cut back workers' hours, leaving fewer employees to produce goods and services.

The ISM reading of economic activity for businesses have sharply dropped to 37.3 in November, from 44.4 in October. This reading is an index survey of businesses on their hiring, production, new orders and other data used to generate this survey. A reading greater than 50 shows the U.S. economy is expanding. The reading in November is 37.3--a serious contraction. Businesses are cutting back on manufacturing and new orders. Retailers have been slashing prices just to move their inventory off the shelves. Employers are shedding jobs to cut labor costs. Even the rise in employee productivity is attributed not to more business hiring, but to fewer employees doing more work. And American consumers are holding back on spending, even as they are worried about the economic downturn, the job losses, and the crumbling housing market.

I don't know when we will reach the bottom of this bad economy.

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