Applied Materials (NASDAQ:AMAT) can be added to the long list of American companies that made a profit in the last quarter and then fired a significant part of their workforces. It is a disturbing trend that will make it harder for the US economy to recover.
Applied Materials said it expected its fiscal year sales to be 30% higher. It then let go nearly 1,500 people.
Many of the cuts at profitable companies have happened in the tech sector. Adobe (NASDAQ:ADBE) and Microsoft (NASDAQ:MSFT) recently announced layoffs. But, some of the largest companies in the US are also cutting jobs despite posting substantial profits. Johnson & Johnson (NYSE:JNJ) and Time Warner (NYSE:TWX) recently fired relatively large numbers of people.
Mounting an economic recovery is the US is difficult and perhaps impossible as unemployment grows. The growth in business and hiring activity usually falls to those companies that are doing well and are willing to add to their payrolls to help fulfill strong demand for their products and services. Some big and successful companies are not thinking that way based on the belief that their profits can reach even higher it they squeeze an extra ounce of productivity out of every worker.
Douglas A. McIntyre
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