Forget rosy jobs data: Layoffs persist
Pepsi and Boeing announce big cuts and take the air out of positive payroll news.
Wall Street received news Thursday of positive jobs numbers in a private-sector payroll report from ADP. Specifically, jobs increased 325,000 in December, led by the service sector and small businesses. Additionally, November's employment numbers were revised slightly higher.
But lest you think everything is coming up roses, keep in mind that many big corporations are still reluctant to hire. In fact, they continue to cut back based on some of the recent headlines.
For starters, PepsiCo (PEP) is considering cutting about 4,000 jobs, according to the New York Post. Citing inside sources, the paper also said Pepsi may reduce pension contributions in order to boost its earnings.
And Kansas employees of Boeing (BA) will be looking for work soon. The aircraft maker will be out of Wichita entirely by 2013, leaving more than 2,100 workers in the lurch. Boeing has called Kansas home since the 1920s but decided the facility no longer allows the company to produce planes competitively in the current market.
While the ADP improvement is mildly encouraging and the drop in unemployment from above 9% to the mid-8% levels is nice, these mass layoffs show that the labor market still has a long way to go.
What's more, these cuts signal what is likely a disturbing trend in corner offices beyond those at just Pepsi and Boeing. Aerospace workers nationwide are bracing for protracted cuts in Pentagon spending as federal budget cuts take center stage in this election year.
The Boeing headline is worrying to workers at competitors like Lockheed Martin (LMT) and Northrop Grumman (NOC), but perhaps of greater concern is that Defense Secretary Leon Panetta is reviewing plans to trim $450 billion from the military budget over the next 10 years. Military contractors have begun to consolidate manufacturing facilities and eliminate thousands of jobs from coast to coast in anticipation of this plan.
As for Pepsi, the company employs about 300,000 workers globally, so the layoff might seem small-time. Pepsi is sitting on eight consecutive quarters of year-over-year revenue gains and is on track to see its fiscal 2011 earnings jump about 37% from 2008 numbers.
So Pepsi isn't in dire straits. It's just squeezing employees to impress Wall Street because it lacks confidence. And lets face it, confidence is the only thing that will ever save this economy.
Pleasant jobs reports like the one from ADP are nice, but workers need to read between the lines. The sad reality is that while small businesses might be hiring and more jobs in the service industry might be available, blue-chip corporations continue to slash costs and benefits to improve their profits.
Jeff Reeves is the editor of InvestorPlace.com. Write him at email@example.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.
Also the Postal Service is closing half of their distribution centers which will prompt massive lay-offs. Yet mainstream media is still trying to convince the sheeple that the employment picture is improving. Sure, just like:
War is peace
ignorance is strength
slavery is freedom
I think you get the idea.........
I'm don't think many of us believe in "announced" figures anymore. Anyone living in the real world, including the author in his private life, knows nothing much is happening outside the fantasies of hype land. The numbers are manipulated to present whatever the present political agenda is. Employment figures are, literally, a joke to any thinking person.
I wonder what it's like to wake up in the morning realizing with the thought "aw ****, I gotta write something today and it has to be positive". Called creative writing. But it pays the bills, draws advertisers and give one something to do.
Untold millions of us are abandoning the mass media. Personally, I've spent considerable time finding people who have their feet on the ground and are writing about things I'm seeing in the world around me.
The U.S. allows guest workers from Mexico to work here in an obscure setup where by the company sponsers them. These are not low paying service jobs. I am an A&P mechanic who works on the planes you fly in. My last manager was a Mexican citizen. Over a quarter of the work force were Mexican nationals. Basically it keeps wages low. The pay for professional aircraft mechanics is about the same as it was in 1991 when I got my FAA license. Factor in inflation and you can see my point. I think the occupy wall streeters had a good point. It,s the corporations that are starving us to death with the help of our elected officals they own. This is not America!
these other countries don't have to attack us, just keep encouraging the outsourcing of cheap labor to areas out of the united states and we will self implode.
I'm afraid you're mistaken, RICH NYC.
It's become a regular thing for the Obama Administration to make announcements about improvement in job creation, consumer spending, GDP growth, etc.
They know that they can depend on their media wh0res (like NBC) to splash the "good news on the economic front" all over the place.
Then, a couple of weeks later, there is usually a quiet announcement, most often late in the day on a Friday, "adjusting" the numbers downward. Of course, these "adjustments' get very little media attention.
getting rid of good paying middle class jobs with benefits.
but hey lets all be happy. they are creating poverty level jobs
with no benefits or retirement. hooray for corporate america
and wall street.
usairways just got rid of good paying jobs in seven cities, the work is still
there, its just now being done by a british company with SCAB labor, paying $7.50 hr with no
benefits, because of two rounds of bankruptsy and paid off judges to
bust union contracts. by the way usair is making money, no justification for doing what they did.
except maybe to keep giving astronomical bonuses to the executive "talent pool" that put them in bankruptcy in the first place.
Don't worry as our economy continues to lay off skilled workers due to government policies and the economy worsens, our labor costs will be so low, since only low tech jobs will be available, and then in 20 years our children can be the ones making clothes pins for the world
Pepsi may reduce pension contributions in order to boost its earnings. nice!! screw the workers first and foremost for earnings.
eight consecutive quarters of year-over-year revenue gains and is on track to see its fiscal 2011 earnings jump about 37% from 2008 numbers.
how much more earning do they need or due they just want to move jobs over sea's.
sorry people keep eating them fatty food snack and slurping down the teeth rotten junk.
I love the Americans who complain about their jobs being outsourced. They complain when their jobs go to a third world country but when they go shopping they buy their clothing made in the 3rd world, groceries from outside the USA, electronics from Asia, refuse to drive an American car, and all home improvement products and tools from Asia, and major appliances from outside the USA. I guess they feel that their job is special and should not be outsourced but screw everyone else's job because I am special and I did get a good deal.
Hell, look at the last election. We had a war hero who was shot down in enemy territory over Vietnam, captured, and tortured. The brilliant American public who did not like Bush and Dick Cheney decided to vote for Dick Cheney's cousin, the radical black that hates whites, did not grow up in the US, was friends with Bill Ayers, and maybe not even a Natural Born US Citizen since his father was not a citizen at birth. The idiots that hated Cheney went and voted for his puppet cousin who carried on his agenda.
At the same time these flag waving idiots in this country keep telling everyone to love and respect veterans but they pissed on a war hero during the last election and elected the opposite. I guess the American public should keep watching football and reality shows, reading people and worrying about who some actress or actor is screwing.
Rather than reading People or propoganda from Repubs and Dems or watching idiots on MSNBC or FOX, try reading the Constitution.
Pepsi company, fire your CEO who doesn't have any confidence in running a multi billion dollar industry. because of this people are loosing there job and home.
even with less confidence CEO they get paid multi million dollar pay check for there service shame on PEPSI Company.
Now that Christmas is over, wait for January numbers.
Jobs should only be those that provide an income that would allow a single income to support a family of 4, Any thing less would have to be negative growth.
Why are temp jobs even counted? Why not base job growth on income taxes collected each week? At least you would have a better look at the increase of income and if people are going to buy more and generate new growth.
"So Pepsi isn't in dire straits. It's just squeezing employees to impress Wall Street because it lacks confidence"
And people continue to CON others by saying that Wall Street isn't in control. Another 4000 people losing their jobs ONLY to boost the bottom line to WALL STREET doesn't punish their stock, so the PIG FAT PIGS at the top can enjoy a nice huge BONUS check.
Yup. More of that trickle down economics creating jobs lying CON party squabble again. Pepsi is sitting on 8 quarters of year over year revenue gains, and revenue is up 37% since 2008. Yes, sounds like a company in financial trouble that needs to cut costs.
Maybe we should all boycott Pepsi products, now. BOA reversed their Debit Fee. Verizon reversed their $2.00 "pay by CC" fee. All because of public outrage.
Let Pepsi's 8-quarter continued sales growth end and give them a real reason to cut costs... Like the bonus checks and benefits package of their big fat PIGS.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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