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Mass Layoffs Have Spiked In The Last Two Months

Mike “Mish” Shedlock, Global Economic Trend Analysis | Oct. 25, 2012, 2:35 PM | 2,446 | 13

Mike “Mish” Shedlock Mish is an investment advisor at Sitka Pacific Capital. He writes the widely read Mish’s Global Economic Trend Analysis.

In precisely the kind of news president Obama does not want heading into the election, Ford (F), Dow Chemical (DOW), DuPont (DD), and Advanced Micro Devices (AMD) all announced mass layoffs this past week as Firings Reach Highest Since 2010.

North American companies have announced plans to eliminate 62,600 positions at home and abroad since Sept. 1, the biggest two-month drop since the start of 2010, according to data compiled by Bloomberg. Firings total 158,100 so far this year, more than the 129,000 job cuts in the same period in 2011.

Companies are saying, ‘Let’s not build up inventories, let’s be lean and mean until we know until we have a better idea of what 2013 is going to look like,’” said Janna Sampson, who helps manage more than $3 billion for Oakbrook Investments in Lisle, Illinois. “There is a fear now as companies see that the economic recovery is not picking up.”

So far, out of 204 S&P 500 companies that have released third-quarter earnings, 120 have reported sales that trailed analysts’ estimates, according to data compiled by Bloomberg.

More Cuts
Those results, similar to the S&P 500’s second-quarter performance, signal employers may increase firings over the next two quarters, according to John Challenger, chief executive officer of Challenger, Gray & Christmas Inc., a human resources consulting firm based in Chicago.

Sales misses are “a sure prescription for layoffs starting to heat up as companies take immediate action to show their shareholders how responsive they are,” Challenger said yesterday by telephone.