Applied Materials: We profit, but you’re fired
Big firms cutting workers as profits improve
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.
But, some of the largest companies in the U.S. are also cutting jobs despite posting substantial profits. Johnson & Johnson (JNJ) and Time Warner (TWX) recently fired relatively large numbers of people.
Mounting an economic recovery is the U.S. 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 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.
Top Stocks writer Douglas A. McIntyre is an editor at 24/7 Wall St.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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