Economy
Layoffs Spread Beyond Autos And Retail (NT)(HPQ)(DELL)(WHR)
Published:
Last Updated:
For awhile, analysts had hoped that the biggest layoffs in the economy would be restricted to already troubled industries including retail, automotive, and airlines. At least companies in those sectors were losing money.
But, news out of places like Nortel (NT), Whirlpool (WHR), and Hewlett-Packard (HPQ) indicate the prophylactic job cuts are being made in almost every industry.
Even Dell (DELL), which made over $700 million last quarter and has $8 million of cash on hand is talking about sharply lowering expenses.
According to Reuters, "Planned layoffs at U.S. firms surged to their highest in nearly five years during October, with cuts in the financial and auto sectors leading the charge as the economic outlook worsened, a report by outplacement firm Challenger, Gray & Christmas said."
That means that the pace of job cuts could be rising at a rate faster than the 200,000 or so people who were put out of work last month. Instead of moving to 6.6% or 6.7% by year-end, unemployment could move higher that 7%.
The news also means that the vicious cycle of layoffs leading to more layoffs is accelerating. As those who are unemployed move out of the pool of consumers, GDP is undercut and companies have to chop costs further to stay ahead of falling sales.
Douglas A. McIntyre
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.