Layoff Plans Rose 12 Percent in June

Reuters | July 2, 2002

[TheDon]

Reuters Business Report Layoff Plans Rose 12 Percent in June

NEW YORK (Reuters) - Layoff announcements by U.S. firms rose 12 percent in June, led by further job losses in the beleaguered telecommunications industry, said a report on Tuesday that suggested the labor market remains weak.

Job cuts announced in June totaled 94,766, up from 84,978 in May, the employment outplacement firm Challenger, Gray and Christmas said on Tuesday. But there were 24 percent fewer job cut announcements compared with June 2001, and job cuts during the second quarter fell 34 percent compared with the first quarter.

Planned job cuts among telecom companies more than doubled in June to 30,455, more than any other industry during the month. And the employment picture for telecoms for the second half of the year is not showing any signs of improvement, said the Challenger report.

Included in the report are the 17,000 cuts announced by WorldCom (WCOME.O) last week. The Clinton, Miss., company announced the layoffs as it faces charges of improperly booking nearly $4 billion in costs which resulted in the appearance of profits over five quarters.

"We will probably continue to see significant job cutting, especially if there is a wave of merger activity as some industry watchers anticipate," said John Challenger, chief executive officer of the Chicago-based firm.

The study also said waning investor confidence as a result of a slew of accounting scandals is hitting multiple industries and will likely lead to more layoffs, starting with the financial sector.

[TheDon]

More bad news for all of you unemployed tech folks...

"And the employment picture for telecoms for the second half of the year is not showing any signs of improvement"

Best start making other plans for earning a living!

[UnBlinkingEye]

More bad news for all of you unemployed tech folks...

Best start making other plans for earning a living!

You've got that right, the trouble is what to do? How is a $95,000-$100,000 income to be replaced in another field? I'm 49 so age discrimination is also a potential factor. I've sent out over 300 resumes and have had only three interviews over the past year and no job offer. I have tried to keep my skills current by studying XML, SOAP, Java, SQL, etc. and was fairly up to date in my past position using C++, MFC, ActiveX technologies. The problem is that with so many out of work, companies are now able to demand and find very specific skill sets and engineers with actual work experience in almost every field.

End of complaining.

[fogarty]

This probably doesn't include the additional 7000 now let go by Motorola, multiple thousands by Vivendi, and maybe upwards of 100,000 more to be let go in the coming 6-12 months from the following companies: Qwest, ImClone, WorldCom, Tyco, Xerox.

Word to the wise: If you have a job now, save every single penny you can and build up 6-9 months of income. This should be a higher priority than any non-essential expense. I'm talking about limiting all restaurant dining, games, non-free recreation, snacks - until that 'safety fund' is established. My wife and I have limited our dining out to three times a month max, and then only to reasonably priced restaurants like Bennigans and Applebee's.

Because with the way the economy is headed, we're more likely to be hitting 7% unemployment by the end of the year than not. For the people who lose their jobs this summer, it may be the middle of next year before they get fully employed again in the same career.

[Kobyashi1942]

Dramatic Bush Recovery Bump!

[fogarty]

You must be kidding. If you think we are having a dramatic recovery, then you are not looking at the facts. The semiconductor industry last week said they don't anticipate an upswing until late 2003 at the earliest. Ford and GM just announced they are extending the rebates and zero-percent financing that cost them so dearly last year in profitability -- because the demand for vehicles has plunged.

We have the Nasdaq a few hundred points above 1000 - almost back to 1994-1995 levels. Millions of Americans are out of work, and have seen their retirement accounts evaporate.

A grim recovery, indeed.

[TheDon]

I can relate, I'm a software/firmware engineer. Even in Orange County, Ca, the so-called Silicon Valley South, I've had all of one interview in 6 mos. I've pretty much given up on getting a job any time in the next 6 mos to a year. I'll still keep looking, but I've decided to start my own software company. If it works out, great! If not, I'll have some good experience on my resume. Best of luck to you.

[TheDon]

Great advice! It does seem like the tech jobs have dried up in particular. There are jobs, but not in the tech sector.

[TheDon]

I think Koby was being sarcastic, but your points are well made.

[UnBlinkingEye]

Best of Luck to you and your new company.

[fogarty]

Yeah, now that I look at his post, it does seem to need a (/sarcasm) tag to it. Sorry Koby about that. I just took your post at face value

[fogarty]

"guess it depends on your point of view. If you are in it for yourself, take care of yourself. If you are in it for your country, continue to spend. "

I must respectfully disagree. If we are truly patriotic we will SAVE. Look at the amount of debt households currently have - we are looking at a debt level higher than any time in history. It would not help the country any to continue to binge on consumer spending when personal bankruptcies and home foreclosures are reaching record levels.

The only prudent thing to do is to save money. This will cause short-term suffering, but it is the only way the excesses are going to be wrung out of the system. Just as a throwing gasoline on a bonfire gone amok will do nothing but burn destructively, continuing our spending binge will not solve the root problem.

So it's not a matter of 'if I am in it for myself' but what is the medicine which will cure the economy. And that medicine is going to be painful in the short term.

Another point, not mentioned by all those who propose 'patriotic spending', is how people can continue to spend when they have no jobs and no income. Am I supposed to go out and buy a new car on credit and put my wife and me at risk so that we can achieve the vaguely stated goal of 'helping my country'?

[dtel]

Misery loves company, welcome aboard the dot.not express!
It's been one year this month for me, 20 years of telecom experience, working on major projects, not worth one plug nickle.
Now I am the dreaded over-qualified, am also starting my small telecom repair/installation business, hopefully I can make 10-20% of previous salary and rock on.
The lifestyle change has been good for my stress and waistline tho, guess there is a silver lining to every cloud, afterall.

[fogarty]

More bad news coming down the pike - Ford announced this morning that car sales were down 10.6% last month, and are the second worst sales drop in history.

When the big boys (Ford, GM, Chrysler) start shutting down production shifts due to inability to sell vehicles, layoffs of 3-4 thousand here and there will look like a drop in the bucket.

[TheDon]

"The lifestyle change has been good for my stress and waistline tho, guess there is a silver lining to every cloud, afterall."

Man can I relate to that! The "dot.not express", haven't heard that one, pretty good! I always refer to us as the Al Queda unemployed, though the economy was already going down before that, 9-11 was kind of the final blow. Best of luck!

[El Gato]

Besides, higher savings rates mean more money available to loan out and thus lower interest rates. This in turn means that more business can borrow, and still remain profitable, to prepare for the upswing, which will be helped along by that very preparation.

[dtel]

Think of all the "character" we are acquiring.
Best of luck to you also.

[TheDon]

A rather bizarre comment about the POV thing. One could say if the politicans cared about the country, they would stop sucking the life blood out of the economy! But instead, they are selfish, not wanting to take the heat for a roll back of the welfare state. In CA, Gov Davis and the Dems are trying to charge the daily expenses of the state gov't on the taxpayer's credit card, i.e. bonds, rather than tighten their belts. They are also planning to up taxes. Sheer insanity!

Personally, I think the advice to build up your savings and cut expenses is wise, and would be endorsed by any responsible person, including President Bush.

I'm not sure how bad things are in other sectors of the economy. Tech is rather bad currently, and for the last year or so. When I say bad, I mean there are no jobs available. Kind of a localized Depression.

[dtel]

Wait til Qwest tanks later this year and things won't be so rosy in Denver either.