After a savage day in which one Wall St. firm closed and another was sold, perhaps there might have been an evening’s respite.
Lehman (LEH) has more than 25,000 employees, 20,000 of which could be out of work. Merrill Lynch (MER) has a staff of more than 60,000. A significant number of them will be pushed aside as the company merges with Bank of America (BAC).
The axe also fell today on many of the poor souls who work at Hewlett-Packard (HPQ) and EDS, which H-P recently bought.
The combined operation will lay off 25,000 people. There is nothing odd about the news given the size of the new company, which will have 320,000 employees. H-P says "the restructuring process is set to take place over three years. Most of the job cuts are to come from areas replicated in both H-P and EDS such as legal, human resources, real estate and information technology operations."
What is hard to take is that H-P’s announcement is part of the relentless pruning of jobs that goes on in a plummeting economy. Weak companies may lose a large portion of their work forces. Stronger ones cut to keep earnings moving up. The recession just makes the cruel process more frequent.
Chopping jobs on Wall St. is not over. If the deep problems at Washington Mutual (WM) and AIG (AIG) keep up, another 100.000 people could loss their positions. In Detroit there are signals that the "downsizing" is not over.
What was once unimaginable may now be real. Businesses could surrender over a million jobs between now and the end of the year. There is no sign that 2009 will be any better.
Douglas A. McIntyre
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