Tuesday, January 27, 2009
Some analysts expect the unemployment rate to hit 10 percent.
WASHINGTON (AP) — The recession is killing jobs at an alarming pace, with tens of thousands of new layoffs announced Monday by some of the biggest names in American business — Pfizer, Caterpillar and Home Depot.
More pink slips, pay freezes and other hits are expected to slam workers in the months ahead as companies desperately look for ways to survive.
“We’re just seeing the tip of the iceberg — the big firms,” said Rebecca Braeu, economist at John Hancock Financial Services. “There’s certainly other firms beneath them that will lay off workers as quickly or even quicker.”
Looking ahead, economists predicted a net loss of at least 2 million jobs — possibly more — this year even if President Barack Obama’s $825 billion package of increased government spending and tax cuts is enacted. Last year, the economy lost a net 2.6 million jobs, the most since 1945, though the labor force has grown significantly since then.
The unemployment rate, now at a 16-year high of 7.2 percent, could hit 10 percent or higher later this year or early next year, under some analysts’ projections.
Obama called on Congress on Monday to speedily enact his recovery plan, warning that the nation can’t afford “distractions” or “delays.”
With the recession expected to drag on through much of this year, more damage will be inflicted on both companies and workers.
The mounting toll was visible Monday as thousands more workers got the grim news.
Pharmaceutical giant Pfizer Inc., which is buying rival drug maker Wyeth in a $68 billion deal, and Sprint Nextel Corp., the country’s third-largest wireless provider, said they each will slash 8,000 jobs.
Home Depot Inc., the biggest home improvement retailer in the U.S., will get rid of 7,000 jobs, and General Motors Corp. said it will cut 2,000 jobs at plants in Lords- town and Lansing, Mich., because of slow sales.
“We are seeing no improvement in labor market conditions,” said Sal Guatieri, senior economist at BMO Capital Markets Economics. “This year could be as bad as last year in terms of layoffs.”
In response to deteriorating business conditions, Caterpillar Inc., the world’s largest maker of mining and construction equipment, disclosed nearly 20,000 job cuts, most of which already have been made. They include 5,000 new layoffs of white-collar workers, which will occur globally by the end of March.
Earlier actions included the elimination of 2,500 workers through a buyout offer announced in December, the termination of about 8,000 contract and temp agency workers, and the reduction of 4,000 full-time factory workers through firings and buyouts.
Oilfield services provider Halliburton Co. said it will eliminate jobs in markets particularly hard hit by the recession, though it didn’t provide details. Its larger rival Schlumberger Ltd. said last week that it will cut up to 5,000 jobs worldwide in the first half of 2009 and consider further reductions this spring.
And Brooks Automation Inc. on Monday said it plans to get rid of 350 jobs, or 20 percent of its work force. It will be the second round of cuts for Brooks, which makes software and equipment for chip manufacturers.