Job Cuts Hold Steady In February As Transport, Consumer Goods Lead

The number of planned layoffs remained virtually unchanged in February, as U.S. employers announced workforce reductions totaling 51,728 during the month, down slightly (3.3 percent) from the 53,486 layoffs recorded in January, according to the latest job-cut report released Thursday by global outplacement firm Challenger, Gray & Christmas, Inc.

Last month’s total was up 2.0 percent from a year ago, when employers announced 50,702 job cuts in February.  Overall, the pace of downsizing is up 18 percent over last year, with 105,214 job cuts announced through the first two months, compared to 89,221 during the same period in 2011.

What may stand out most about 2012 job cuts so far is not the number of layoffs, but the source.  Last year, job cuts in the first two months were dominated by the government sector; a trend that would continue throughout 2011.  Through the first two months of 2012, job cuts have been concentrated in consumer products and transportation.

Download full report here.

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Merck & Co. To Cut 13,000 Jobs

This morning, Merck & Co. announced a further restructuring which would end up eliminating 30% of the companies’ workforce. Another 13,000 job cuts were announced by the Whitehouse Station, NJ-based company, on top of 17,000 previous cuts, according to the Wall Street Journal. The news comes amid the company’s second quarter earnings which stated revenue had risen by 7% on sales growth for diabetes drugs. According to Challenger tracking, job cuts in the pharmaceutical and bioscience industry peaked in 2009, when companies announced 61,109 layoffs, 12 percent more than the 53,636 announced in 2010. Through June of this year, 4,771 job cuts have been announced in the pharmaceutical industry.

 

 

 

ANNOUNCED PHARMACEUTICAL
JOB CUTS

 

 

2011

2010

2009

2008

2007

January

2,090

8,170

22,063

7,628

8,279

February

335

17,687

8,806

1,491

3,653

March

960

308

17,796

1,786

2,086

April

169

1,049

1,671

6,362

177

May

135

6,943

698

3,701

519

June

1,082

830

515

761

1,119

July

 

2,023

1,134

1,048

2,668

August

 

255

321

2,103

3,312

September

 

6,069

5,579

2,700

713

October

 

1,929

113

8,956

2,203

November

 

4,905

2,413

1,912

949

December

 

3,468

0

4,566

6,054

TOTAL

4,771

53,636

61,109

43,014

31,732

 

 

Bulletin: Auto Quality Issues, Health Care Costs

Automotive Quality Issues Could Lead To Layoffs
As U.S., Japanese and European officials continue to probe recent quality issues with Toyota’s line of products, the nation’s parts manufacturers may find themselves under increased pressure amid falling profits. In addition to Toyota’s troubles, auto manufacturers in Michigan, including Yazaki Corp. of Canton and Denso International America of Southfield were included in a separate inquiry as part of an anticompetitive investigation, according to a report by the Wall Street Journal, as was Tokai Rika Co. of Plymouth. Last year, employers in the automotive sector announced 52,271 layoffs in 2009 and over 4,000 layoffs were announced in the auto industry in January, according to Challenger, Gray & Christmas, Inc.

As Health Care Summit Begins, New Survey Reveals Employers’ Pain
With President Obama and lawmakers from both sides of the aisle meeting today in a summit on health care, a new survey of employers further demonstrates the need for reform, as a growing number of companies losing confidence in their ability to provide health care benefits in the future. In the survey, conducted by the National Business Group on Health and Towers Watson & Co. and reported on by Workforce.com, only 57 percent of employers said they are very confident they will continue to offer health care benefits 10 years from now, down from 62 percent in 2009 and 73 percent in 2007. The survey also found that 83 percent of employers either have made significant changes or expect to revamp their health care strategies in the next two years, up from 59 percent in 2009. As more companies are compelled to lower or drop coverage, more and more Americans will join the ranks of the uninsured and underinsured. Should the U.S. move away from the tradition of employer-paid health insurance or should lawmakers be finding ways to make it easier for employers to provide coverage? What steps are some employers taking in attempts to keep health care costs under control?

TELECOM SECTOR MAY CONTINUE TO SHED JOBS

An improving economy may not necessarily lead to a slowdown in job cuts for the telecommunications sector, which has announced nearly 110,000 layoffs since the beginning of 2007. While the last two years of telecom job cuts remain significantly below the levels reached in the early 2000s, they are nearly double the 28,206 job cuts announced in 2007.

The cuts are due in large part to a major shift in the way consumers use communications devices; specifically, they are increasingly shifting away from traditional landlines to cell phones and internet-based services, such as Vonage and Skype.

Tuesday morning, Qwest Communications announced that fourth-quarter earnings fell 39%, as more than 900,000 business and residential customers disconnected their landlines during the last three months of the year. The losses would have been much steeper were it not for increases in its high-speed Internet and cell phone business, which grew 4.5% and 18.5% respectively, according to news reports.

“Verizon and AT&T also have seen significant losses in the landline customers over the past two years. Job cuts in these traditional services areas could continue to mount until each company has just enough staff to service existing lines,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.

AT&T, in fact, appears that they would just assume abandon landlines entirely. Late last year, the telecom giant filed a 32-page appeal to the Federal Communications Commission, asking that regulations requiring it to support an analog landline phone network be phased out, allowing it to go entirely with VOIP-provided phone service. The phone company pointed to the fact that between 2000 and 2008, usage of its landline services dropped 42%, while revenue generated by this service dropped 27%.

It will probably be a while before the FCC considers such drastic measures, particularly since 20% of Americans still rely solely on landlines. That percentage is unlikely to change in the near future, partly due to the lack of cell coverage and Internet access in rural areas.

“Regardless of the FCCs position, the telecommunications companies will dedicate more money and manpower to improving and expanding their broadband and wireless networks. These areas of their business will most assuredly see strong hiring over the next five to 10 years, particularly if telecoms finally commit to expanding their reach to underserved rural communities,” said Challenger.


ANNUAL TELECOM JOB CUTS, 2001 – 2010


2001: 317,777


2002: 268,857


2003: 111,342


2004: 98,734


2005: 70,127


2006: 45,947


2007: 28,206


2008: 48,648


2009: 44,068


2010: 14,010*


*Through January


Source: Challenger, Gray & Christmas, Inc.

John Challenger on July Job Cuts (CNBC)

http://plus.cnbc.com/rssvideosearch/action/player/id/1205506216/code/cnbcplayershare

POLITICS AND JOBS: Which Sectors Win Under The Candidates

As lawmakers continue to debate and restructure a proposed $700 billion bailout plan for Wall Street, the two presidential candidates have made the economy and the job market the focus of their campaigns. Each candidate promises to enact policies that will help ignite a recovery and new job growth, but where that growth occurs will depend heavily on who wins in November.
A McCain win will like mean job gains in oil and gas, aerospace/defense, nuclear engineering, insurance, automotive and financial services. Meanwhile, an Obama win could help spur job growth in education, telecommunications, manufacturing, alternative energy industries and construction.

It’s hard to say which future president will succeed in delivering an economic recovery and job growth, primarily because so many other factors will play a role in determining the outcome of their policy initiatives.

Through September, employers have announced 763,090 job cuts, nearly as many as the 768,264 job cuts announced in all of 2007, according to the latest layoff tracking by Challenger, Gray & Christmas.

Meanwhile, the latest government data show that the unemployment rate has climbed to 6.1 percent, up from 4.7 percent a year ago. The number of people in August who have been out of work for at least six weeks reached 1.8 million, compared to 1.25 million last year. Furthermore, the number of Americans working part time due to slack business conditions and the unavailability of full-time positions has increased by 27 percent over the last 12 months to 5.7 million.

JOB WINNERS UNDER PRESIDENT OBAMA


Manufacturing – Increasing labor costs in foreign markets and higher shipping costs are already starting to weaken the attractiveness of off-shore manufacturing. Senator Obama’s plan to provide tax breaks to companies that manufacture products in America could be enough incentive to move some overseas production back to the United States.

Education/Teachers – As thousands of teachers lose their jobs across the country due to lack of funding or decreased enrollment, Senator Obama plans to provide funding for teacher rewards such as higher pay and intervention strategies that include teaching teams, parent programs and personal academic plans to engage students in middle school. This initiative should create thousands of opportunities for teachers in early childhood education as well as academic counselors and mentors.

Alternative Energy – Senator Obama pledges to invest $150 billion over the next decade in renewable energy, including developing and perfecting biofuel technology, creating and commercializing plug-in hybrid and electric cars, investing in low-emission coal plants, transitioning to a digital electricity grid and advancing solar and wind initiatives. These projects will require thousands of engineers, environmental scientists and equipment manufacturers and operators in the automotive, transportation, chemical and technology industries.

Construction – Senator Obama has pledged $60 billion over the next ten years for projects to develop and maintain the national infrastructure. Construction workers will be needed to build or repair bridges and roads across the country, with job creation expected to reach as high as two million direct and indirect jobs per year.

Civil Engineering – The money provided for infrastructure projects will also go toward the planning and implementation of designs for cities and towns. Civil engineers will be needed on the local and national level to develop and oversee these plans.

Telecommunications – As the internet and cell phones become more and more important to Americans – from finding jobs to applying to college – Obama pledges to supply broadband networks to every community in the nation. With tax and loan incentives, thousands of telecommunications and technology workers will assist in reworking the nation’s wireless spectrum and creating new applications and next-generation facilities.

JOB WINNERS UNDER PRESIDENT McCAIN

Oil & Gas – Senator McCain’s energy policy includes exploring domestic oil and natural gas supplies in order to end dependence on foreign oil. This move will likely create thousands of jobs, including petroleum technicians to collect information on oil locations, equipment manufacturers, engineers and laborers.

Nuclear science/engineering – McCain’s plan to build 45 new nuclear power plants over the next two decades, providing an alternative source of cheap electricity is expected to produce 700,000 jobs. Seasoned workers will be needed to run plant operations, but entry-level workers can gain experience as laborers, with potential to replace their retiring counterparts after several years of training. The new plants will also need power distributors and dispatchers to monitor the flow of electricity.

Construction – A portion of the 700,000 jobs needed to build 45 new nuclear power plants will come from the actual construction. McCain also proposes legislation to manufacture environmentally-friendly buildings, both for residential and business use, creating thousands of opportunities for construction workers.

Insurance – Employer-sponsored health care costs have more than doubled over the last ten years, and the cost of insurance is on the forefront of most voters’ minds. Senator McCain proposes to reform the existing tax code to allow workers to choose their insurance providers outside of what their employers offer. This move will likely mean more competition in the insurance industry, creating hundreds of opportunities for sales people, claims adjusters, underwriters, examiners, investigators, management analysts, and administrators.

Automotive – Senator McCain wants to provide incentives for automobile makers to develop fuel-efficient and hybrid technologies. Thousands of dollars in tax credits for fuel efficient cars, as well as a proposed $300 million prize for plug-in hybrid and fully electric batteries will likely substantially increase job opportunities in automotive engineering and manufacturing.

Aerospace/Defense – Senator McCain strongly supports the development and deployment of missile defenses, increasing the size of the military and upgrading military technologies. To meet this goal, the government will have to order an increased amount of missile defense systems, weaponry and safety equipment, potentially creating thousands of manufacturing and engineering jobs, as well as dynamic recruitment efforts for the Armed Forces.

Wall Street Mess Could Mean Most Financial Layoff On Record!

Challenger’s monthly layoff tally shows that the sharp decline in financial sector job cuts in August appears now to have been the calm before the storm. The buyout of Merrill Lynch and the bankruptcy of Lehman Brothers demonstrate just how fragile the sector remains.

Although London’s Barclays retained 10,000 Lehman workers (this Bloomerg report says that figure may be cut in half), and Nomura, a Japanese investment bank took over three foreign units saving more than 4,000 jobs, the remainder of the 20,000+ workers will most likely be looking for new employ.

The financial sector has already shed nearly 103,000 workers so far this year, according to Challenger’s total.

Quote From CEO John Challenger: “Financial firms announced just
2,182 job cuts in August, offering some hope that the turmoil was coming to an end. A year-end spike in financial cuts, ignited by these latest actions,
could send 2008 job cuts in the sector past the 2007 record total of
153,105.”

For a breakdown of financial sector layoffs through August click here.