Are mass layoffs back?
Research In Motion is the latest company to announce big job cuts, signaling a trend that could further damage the economic recovery.
RIM isn't the only one wielding the ax this summer. Cisco Systems (CSCO) recently announced job cuts of 6,500, rocking a tech sector that had been relatively stable in the recession. Lockheed Martin (LMT) also wants to cut 6,500. Borders is liquidating and laying off thousands of employees in the process.
Each of those layoff announcements is devastating for the families involved. Put them together, and we're starting to see a return of sweeping job cuts that could further erode the fragile economy.
Companies are laying off employees at a level not seen in nearly a year, The Wall Street Journal reports. It couldn't be happening at a worse time, with an unemployment rate stubbornly set at above 9% and an economy that doesn't inspire confidence in anyone.
The problem with these levels of layoffs is that they spread with alarming speed in a vulnerable host -- and the current economy fits that bill exactly. Companies see cuts at places like Cisco, generally considered a bellwether of the tech sector, and then look more critically at their own headcounts.
In May, the Journal reported, government and private employers cut 1.78 million workers. That's the highest level in nearly a year. Nearly all of those positions were in the private sector.
The scale of these layoffs is one reason the U.S. has added only 21,500 jobs, on average, over the past two months, the Journal reported. And if the layoffs continue, those monthly numbers could go into the red.
"Everything in business is confidence," Howard Davidowitz, the chief executive of a retail consulting and investment banking firm, told the Daily Ticker. "You lose confidence, and businesses can't deal with that, (and) who could have confidence with what's going on in Washington?"
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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