By Timothy R. Homan From the bloomberg.com
Dec. 3 (Bloomberg) — Job cuts announced by U.S. employers in November more than doubled from a year earlier, led by a surge at financial firms as the credit crisis deepened and the global economy faltered, according to a private placement firm.
Firing announcements rose 148 percent to 181,671, the most since January 2002, from 73,140 in November 2007, Chicago-based Challenger, Gray & Christmas Inc. said today. The figures aren’t adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of monthly numbers.
Companies are slashing jobs as access to credit remains frozen and sales weakened worldwide. A deteriorating labor market is likely to undermine consumer confidence and spending, pushing the economy further into what may become the longest recession in 70 years.
“Those hoping for a holiday reprieve in downsizing as Christmas approaches could be disappointed,” John A. Challenger, chief executive officer of the placement company, said in a statement. “December has historically been among the larger job-cut months of the year, with many employers making last-minute staffing adjustments to meet year-end earnings goals.”
Labor Department figures due this week may also show firings accelerated in November as companies cut workers for an eleventh consecutive month. Payrolls last month fell by 325,000 after declining 240,000 in October, according to the median forecast of economists surveyed by Bloomberg News. Total job losses have climbed to 1.2 million so far this year.
Surpassed 1 Million
The Challenger report today showed companies have announced a total of 1,057,645 cuts so far this year, up 46 percent from the same period in 2007. Job cuts have surpassed 1 million for the first time since 2005.
The number of planned job cuts increased 61 percent in November from the 112,884 announced in October, Challenger said.
Financial companies led industries in announced cutbacks with 91,356 reductions last month after Citigroup Inc. said it would cut 52,000 workers from its payroll. Retail employers followed with 11,073 firings, while computer and electronics firms combined for 15,350 cuts.
Applied Materials Inc., the largest maker of chip- production machinery, said last month it will cut 1,800 jobs, or 12 percent of its workforce, as sales slow.
“Almost daily we are hearing customer reports of factory slowdowns, closures and capacity reductions,” Mike Splinter, chief executive officer of the Santa Clara, California-based company, said on a Nov. 12 conference call. “This will be an extended downturn, lasting a year or longer.”
The Challenger report does not always correlate with figures on first-time jobless claims or employment as reported by the government.
Many job cuts are carried out through attrition or early retirement. Some employees whose jobs are eliminated find work elsewhere in their companies, and some announced staff reductions never take place because business improves. Challenger’s totals also include foreign affiliates.