Job Cuts Top 100,000 in January - Report

Reuters ^ | Tuesday February 3, 2004

[Walkin Man]

Job Cuts Top 100,000 in January - Report Tuesday February 3, 12:50 pm ET

NEW YORK (Reuters) - Planned job cuts in January were 26 percent higher than in December as U.S. jobs moved to countries like India, China and the Philippines, and as mergers made some jobs redundant, according to a report on Tuesday.

The outplacement firm Challenger, Gray & Christmas Inc., said post-holiday job cuts reached 117,556 in January surpassing the 100,000 threshold for the first time since last October.

Financial markets were on their toes awaiting January's payrolls report to be issued by the Labor Department on Friday after a disappointing December report that showed an increase of only 1,000 jobs.

Analysts had expected 150,000 new jobs to show up in the data, and the worse-than-expected outcome showed that the U.S. economic recovery has yet to produce sustained jobs growth. Economists again expect a figure of 150,000 new jobs in January.

Poor job creation is a headache for President Bush as he seeks re-election in November. The economy -- specifically job creation -- is expected to be a key issue in the campaign. Since Bush took office, more than 2.3 million non-farm jobs have been lost.

According to Challenger, consumer product companies led the January cutbacks with 22,775 job cuts, the largest number of reported job cuts in that sector in a single month since 1993, according to Challenger.

Challenger said one of the main factors for the job cuts in January was an increase of employers eliminating jobs in the United States and shifting to service providers in India, China and the Philippines among other countries.

Another factor was an increase in mergers so far this year. The survey's head, John Challenger, noted in a statement that one of those mergers will result in "as many as 10,000 job cuts to take place as redundant positions are eliminated."

[RnMomof7]

I'm really frightened to think finance, insurance, and other transactions with consumer sensitive information will soon be sent overseas. Bank acct#'s, SS#'s, addresses, phone#'s....

Well already much of your credit information is being processed over seas, and some of the dunning calls originate from there too.

The company that held (past tense) my homeowners insurance (Hartford) outsources. So I changed companies

I wonder how one bonds someone in a third world country???

I think Americans need to refuse to do business with people that are obviously not Americans on the phone.(And BTW Hartford did not drop my rates because they employ cheap labor.) The only one it benefited was the CEO

My new company is still here and the policy was less than Hartford.

[1rudeboy]

For every taxpaying job lost to outsourcing, the company should have to make up that tax revenue to the US Treasury . . . .

Now there's a plan. If fully implemented, soon there won't be a company with more than 50 employees left in the United States.

[chimera]

We could not only lose the presidency, but control of Congress as well if things don't turn around in a hurry.

It's happened before, 1932, 1992. All it takes are bad times and some smooth-talking Rat to come along and promise to Do Something. Desperate people who feel they have nothing to lose going with some populist demagogue will jump on the bandwagon. Even clear-thinking people who realize that the Rat proposals will solve nothing and only result in higher taxes will be swept away in the maelstrom. We ignore the lessons of history at our peril (now there's a line sure to bring in Texas Dawg with his proverbial "We're all doomed!" mantra).

[Dr. Frank fan]

Understand ... if I get that job at Sun ... I'll be one of the lucky ones.

What will happen to the other, unlucky ones?

Do YOU really want engineers like me selling real estate loans

1. First of all, if you are selling real estate loans, you are not an engineer, but a real estate loan seller.

2. But, since you have training and presumably a certification in engineering, and I think that training is valuable, then yes, I'd just as soon see you put that training to use. But not if the alternative is that you become homeless and then starve to death. I don't want that to happen to you, which is why I'm glad that it (apparently) won't.

The particular national security issue you raise (outsourcing weapons systems design to India) could be a valid one I suppose. There are valid security concerns to be protectionist in areas concerning national security.

I'm not sure what you want the government or Bush to do about all this, if anything. All I know is that we're supposed to blame Bush anytime someone loses a job. Let me know if there's more to it than that.

[1rudeboy]

I wonder how one bonds someone in a third world country???

If something bad happens, using your example of Hartford Insurance, you go after Hartford and not the (un)bonded employee.

[lelio]

A better idea would be to reduce taxation, regulation and paper work.

Which would work if the discreptancy in wages was within 30-50%. But its not even close to being that -- its 10x "cheaper" overseas for software work and 15x cheaper for manual labor.

[bvw]

That's a false *belief*.

Some of the best R&D is done right at the point of manufacturing or of use. When you move the manufacturing oversees, obviously that huge part of R&D has just vaporized too. And when you move manufacturing and that high-turnaround front-line R&D away from a market ... common sense suggests that less responsive products will be had, that the lag in response will hamper innovation, thus R&D.

What you *may* be seeing left are some boutique design and R&D groups who are now able to, and indeed are by hunger necessitated to, flood the (remnant) information channels, with bright glossy shining fluff stuff -- the tech press, the sciences press, the general circ magazines, the venture newsletters, etc That until this inversionary outsourcing of design, research and production dynamics had been filled with more pedestrian articles and advertisements of the kind US industrial, chemical, electronic and production engineers used to read.

Reality is far harder than you reckon, and is likely to get worse.

[clamper1797]

Understand ... if I get that job at Sun ... I'll be one of the lucky ones.

What will happen to the other, unlucky ones?

Perhaps they will keep trying or find a job outside the field ... if they can. Do YOU really want engineers like me selling real estate loans
1. First of all, if you are selling real estate loans, you are not an engineer, but a real estate loan seller.

That's the point

2. But, since you have training and presumably a certification in engineering, and I think that training is valuable, then yes, I'd just as soon see you put that training to use. But not if the alternative is that you become homeless and then starve to death. I don't want that to happen to you, which is why I'm glad that it (apparently) won't.

I appreciate that ... no I won't starve ... my wife is a phamacist ... we may have to sell the home ... it goes on the market Friday. BUT I won't starve.

The particular national security issue you raise (outsourcing weapons systems design to India) could be a valid one I suppose. There are valid security concerns to be protectionist in areas concerning national security.

I'm not sure what you want the government or Bush to do about all this, if anything. All I know is that we're supposed to blame Bush anytime someone loses a job. Let me know if there's more to it than that.

I blame the government policies that have enabled the offshoring trend. Over taxation, over regulation, substities for off shoring companies.

I don't have as much a problem with offshoring companies as I do with the importation of guest invaders workers to our country when there are so many Americans out of work.

[templar]

It's only a hundred thousand jobs. At that rate, should it remain constant, that's only 1.2 million jobs this year. But, then, January is a usually a slow month, maybe it'll pick up steam as the year progresses.

[Paul C. Jesup]

You forget with the extra capital, it gives middle class people options in keeping the companies in the country, like buying stock in the companies.

[lelio]

What you *may* be seeing left are some boutique design and R&D groups

I agree with you on that. What I can see happening is that as software becomes a commodity business with little differentation in long term projects (ie a majority fail) the jobs you'll see remain stateside are in boutique shops. Ones with quick turnarounds.

What got me thinking about this was a show on the radio about musical scores for reality TV shows. What happens is that the show finishes filming on a Friday and the score has to be done before Monday's showing. The score has to be perfectly done the first time through -- little chance for screwup as there's a strict deadline.

That's the kind of job you can't easily outsource as one problem in execution leads to big problems. Although I'm not sure how many people are listening to the music on "Joe Millionaire."

Now how does this apply to the realm of chip designs and programmers? Its hard to say as chip design isn't something you can do over a weekend. There are a number of short term programming jobs that can fit this mold however. And with the advent of free open source frameworks the market for an highly skilled programmer might go up -- only if he can turn out a product quickly. If your client has a year to implement something he might decide to go the cheap route.

[Dr. Frank fan]

[engineers] Perhaps they will keep trying or find a job outside the field ... if they can.

What if they can't?

I blame the government policies that have enabled the offshoring trend. Over taxation, over regulation, substities for off shoring companies. I don't have as much a problem with offshoring companies as I do with the importation of guest invaders workers to our country when there are so many Americans out of work.

I think our differences may not be as large as you may have previously assumed. Best,

[templar]

I recently heard that now attorneys and para legals jobs are now being outsourced.

Paralegals could be. All legal office workers other than those that are engaged in the actual practice of law could be. Attorneys would need to be BAR members (or otherwise licensed by the courts) to practice. Otherwise something called the Unauthorized Practice of Law becomes involved.

[optik_b]

"Ahhhh, a true Conservative. What is the government gonna do for meeeeee"

Everyone is big fan of free markets until it affects them. I guess it doesn't seem fair that their jobs get outsourced and can be done better and cheaper in India and China. Free markets are brutal, there is no point sitting around complaining about it. Maybe what they should do instead is look at what our government is spending all its money on, prescription drugs for 540 billion, rebuilding islamic countries, etc...decide if that is the wisest use of our resources. We are running a deficit of over 500 billion. Meanwhile countries which dont have to pay for these huge expenditures Germany spend money giving incentives for high tech companies like AMD to locate plants there. The fastest growing economies in the world like China maintain an ultra-low tax rate.

[clamper1797]

BTW ... you seem like you are open to hear what is really going on and I do appreciate that ... understand that several of us (right here on this thread) are living this nightmare. When faced with the possiblility of losing everything one has worked for ... people may get testy.

When we hear some person who really doesn't know the situation tell us to open a business ... as if that was a viable and immediate solution to our plight ... it is insulting. Of course we have thought of that ... then we hear another bray that we should get a job ... any job ... as if we have not tried ... that is VERY insulting. We high tech workers are NOT looking for a handout ... in fact most of us (me included) don't even want a helping hand. I'm speaking for myself here ... but all I really want is for people to understand what's really going on and the danger in it for all of us ... and to understand that we ... the former technological backbone of this country are now the unemployed ....

[TaxRelief]

This is a typical post-Holiday job cut number. Actually it's low.

[Nimitz]

Well put brother.

[Elliott Jackalope]

Glad you like my quote.

I'm blushin' ovah heah...

[optik_b]

"You free traitors are amazing."

How do your propose to restrict multinational corporations from being able to freely assign labor to the place that is most cost effective?

What American industries are the most competitive in the world: hollywood, drug companies and technology. All of those are highly globalized industries that are deeply dependent on foreign money. Our worst companies are the ones that do not compete well globally. The answer is to stop wasting so much money on taxes nad useless farm bills and prescription drug benefits and instead lower the cost of doing business here.

[dfwgator]

I still belief that offshore outsourcing, while it has impact, it the least of the three causes of the high unemployment rate among techies. First, and foremost is the lack of new projects, second is the effectiveness of the technology in requiring fewer human beings to do what it took many more to do just a few years ago, then when you add in the globalization aspect it is a triple whammy. Not that it is of much comfort now, but when it turns around (and it will) employers will be scrambling to hire, albeit we'll see nowhere the rates we saw in the late 90s. The good news is that the "Johnny Come lately" techies that climbed on the bandwagon for the quick buck will be long gone and leave it to those who do this because we love it.