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from today's Globe&Mail
Ed
Planned U.S. job cuts surge
By ROMA LUCIW Wednesday, December 7, 2005 Posted at 12:45 PM EST Globe and Mail The number of pink slips companies were planning to hand out surged 22 per cent to 99,279 in November from October, according to a monthly tally from Challenger, Gray & Christmas Inc. The jump in month-over-month layoff announcements was fuelled by the "heavy downsizing" in the automotive and government sectors, the global outplacement firm said Wednesday. It also noted that job-cutting picks up at the end of the year as companies try to meet earnings and budget goals. It is the third month in the a row that planned U.S. layoffs have risen, Challenger said. The November planned jobs cuts are the highest since July's total of 102,971, although they are 5 per cent below the 104,530 unveiled in November, 2004. So far this year, U.S. companies have announced 964,232 job cuts, 3.6 per cent more than at this point in 2004. If the pattern holds next month, the 2005 job-cut total will top the 2004 tally of 1,039,735, making it the fifth consecutive year where employers trimmed more than a million jobs. "Downsizing in the auto industry is expected to continue well into the new year, as companies try to bring production capacity in line with the reality of the market," said John Challenger, the company's chief executive. He noted that nearly half of the November auto-related planned job cuts happened at the supplier level, and that a rebound to job growth for the industry and its supply chain does not appear possible in the near future. "They must deal with significant overcapacity issues, labour issues, and the elephant on all of their backs the issue of under-funded and over-burdened pension plans," Mr. Challenger said. "It is a mess that will take years to address." Almost 11 per cent of this year's job cuts this year have stemmed from the automotive sector, which has announced 105,886 cuts this year, including 16,870 in November, the Challenger report said. On Wednesday, the Detroit News reported that Ford Motor Co. executives have drafted a plan to close at least 10 North American factories and eliminate 25,000 to 30,000 blue-collar jobs within five years. Ailing General Motors Corp. announced last month that it is slashing 30,000 jobs (including roughly 3,900 jobs in Canada) and closing plants and service centres across North America. On top of the impending flood of job losses in the automotive sector, the U.S. economy is about to feel the effects of massive military base closures. "While military personnel will be re-stationed, the civilian workers that manned these bases and the all of the workers in local businesses that benefited from the bases are starting to lose their jobs," Mr. Challenger said. "On top of this, state and local governments are still suffering from budget deficits that are forcing continued job cuts." Nonprofit and government employers, particularly those at the state and local level, are also making major cuts to their payrolls. They plan to trim 14,195 job cuts in November, bringing the year-to-date tally to 86,376, which ranks second among all industries, the Challenger report noted. Transportation, pharmaceutical, industrial goods and telecommunications also experienced a substantial amount of planned of layoffs in November. |
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