Big corporate layoffs not over yet
May 19th 2009 8:00AM
Updated Dec 3rd 2009 11:38AM
There has been a lull in the number of big companies announcing the massive corporate lay-offs in which thousands of people are pushed out the doors. If huge American firms would stop aggressive chopping, the sharp rise in unemployment might slow.
Recent news, however, suggests that lay-offs may not be slowing at all. American Express (AXP) announced it would cut 4,000 people on top of earlier firings. Chrysler is extending buy-outs to more of its blue collar workers. The dealers that GM (GM) and Chrysler are closing down will have to fire tens of thousands of people. Medium-sized banks facing large real estate losses will not be able to keep on all of their employees.
Economists have expressed optimism that the number of people fired each month will drop below the 600,000 a month that was the norm earlier this year. The figure may drop below 500,000 during the summer and get even better after that. But the optimism may be misplaced. As second quarter earnings approach, companies that have not been able to improve their financial figures will probably go through another round of jobs cuts.
Until the largest American companies with the strongest balance sheets stop laying people off, it is not likely that the unemployment picture will improve soon.
Douglas A. McIntyre is an editor at 24/7 Wall St.