In another round of cost-cutting measures, 7 major corporations of US have announced job cuts to the tune of 71,400, on Monday, January 26, 2009. This takes the aggregate job-cuts this year to more than 2, 50,000!!
Caterpillar Inc announced 20,000 layoffs for the first quarter of 2009 whereas 8,000 workers will be shown the exit by Pfizer Inc. Sprint Nextel, who already reduced its workforce by 4,000 a year back, has announced 8000 job cuts. That’s almost 14 percent of its current workforce. Home Depot Inc will not only cut 7,000 jobs but also close down 30-35 of its design outlets.
General motors will cut 2,000 jobs in the already ailing states of Ohio and Michigan and Texas Instruments Inc, Philips Electronics, Corus Group and ING would cut 3400, 6000, 3500 and 7,000 jobs respectively, locally and globally.
And the only thing to blame this downsizing spree on is the ever deepening recession. First it was seen that only financial and housing sectors would be affected by it, though of course, US Auto Industry has been entrapped into it, recession and job cuts are manifesting themselves in all the sectors including retail, telecom and electronics.
Where the global economy will head from here, no body knows or predict. It’s as if these changes are taking place at a faster pace than governments can come up with measures and stimulus packages to help them. Its spiraling put of control. But one good aspect is that the situation is already very grim and a slight upheaval will also be very noticeable because it can’t get worse than this or can it??
But what comes as a surprise is that the stock market reacted kind of positively to the job-cut scenario with the shares of the firms under consideration showing an appreciation in their values. Is it like investors are approving of this blatant way to reduce costs??
What they don’t realize is that it’s a vicious cycle and will only deepen the scar. When there are no jobs and income to spend where the demand to produce more will come from?? Things are not going the way they should given the amount of money being allocated towards bail-outs and releasing the credit crunch. But as a certain economist puts it, all the movements are taking shape of a deep V and the restoration would ultimately happen at the same rate as the down fall. Well that sounds too hypothetical but all we can do right now is hope this comes true.
