Posted on 11/16/2008 10:26:30 AM PST by dano1
Manpower, the global recruitment company, warned it expected mass layoffs in western economies in December as companies sought to slash headcount ahead of what many forecast will be one of the toughest years for the global economy since the early 1990s.
Jeffrey Joerres, chairman and chief executive officer of the US-based group, which recruits 5m people a year for its clients across 80 countries, said the crunch would come in December when corporations wrapped up their budgets for 2009.
Most would downsize now in line with their expected revenue and profit targets rather than get into next year and have to start adjusting their workforces for what they expected to be a rapid deterioration in the economy.
“They feel as though: ‘I may not have been hit by this downturn yet but I’m going to be and I need to be fiscally responsible.’ That’s really putting tremendous pressure on the labour market,” Mr Joerres told the Financial Times in an interview at the World Economic Forum in New Delhi.
Unemployment is already on the rise in some parts of the developed world. In the US, the jobless rate has already reached 6.5 per cent, the highest level since February 1994 while in the UK it is 5.8 per cent, the highest since 2000.
Fast-growing emerging markets such as India have yet to feel the full effects of the slowdown. But already there indications companies are slowing their hiring and in some cases laying off staff amid a deterioration in the economy.
Mr Joerres said the slowdown was affecting Manpower, which recruits employees on behalf of its clients as well as provides other services related to recruitment and human resources.
In the third quarter of this year “billable hours”, a measure of the amount of labour provided by the company for its customers, fell 8 per cent globally and 15 per cent in the US compared with a year earlier, Mr Joerres said.
“Without being melodramatic but realising that facing reality does help, there’s been a speed which has taken our breath away in how fast this has slowed down,” said Mr Joerres.
He said anticipated the fourth quarter would be ”more rugged” with billable hours expected to fall 10 per cent globally.
The unusual trend in this cycle was that companies were slashing their workforce ”in anticipation” of the slowdown rather than after feeling the full effects, as in previous downturns.
Unlike after the bursting of the technology bubble, there were now several large sectors that were struggling, ranging from automotives to the financial sector, which could lead to a deeper round of layoffs.
However, he said the longer term trends characterizing the labour market would continue even after this cycle, such as the aging of populations in Japan and Europe and the increasing global mobility of the workforce.
Looks like the Titanic hit another iceberg.
“The unusual trend in this cycle was that companies were slashing their workforce ”in anticipation” of the slowdown rather than after feeling the full effects, as in previous downturns”
It’s because everyone knows they cant get bridge loans, which has never happened before, so they’re firing now instead of waiting to tell people ‘sorry, cant pay you for last week or the week before, AND you’re fired’.
It’s going to be a lot worse than the 1990s. I’m worried about my younger kids who are just graduating from college. No matter how well they do—and one of my daughters who will come on this market next spring has done very well indeed—it will be tough to find a job, or even an internship.
Wouldn’t more businesses go to hiring temp and part timers to avoid paying more for labor? Manpower, an established player, may see an increase in their bottom line.
The next couple of years will be interesting, to say the least.
That’s another word being much abused anymore — global.
Stop using that word.
Oh. Be sure to notice the part about “Benetton” behind the Argentina link (far down in the account of conditions there).
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