Layoffs may chill recovery
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Manufacturing News, Source : The Manufacturer US
Published : 03 Dec 2003 13:35
Despite other economic indicators that the economy may be on the road to recovery, layoffs continue to mount in the manufacturing sector.
Electronics and entertainment giant Sony announced in October that it would cut 20,000 jobs over the next three years. Auto parts manufacturer Delphi, meanwhile, announced in October that it would cut some 8,500 jobs during the next year.
These latest layoffs are apparently part of a growing national trend. Chicago, IL-based outplacement consultancy Challenger, Gray & Christmas reported last month that the pace of job-cut announcements in October rose by 125 percent, with employers announcing the layoff of more than 171,800 workers.
"While perhaps shocking to some, the October spike follows a trend of heavy year-end downsizing that has occurred since we began tracking job cuts in 1993," said Challenger, Gray & Christmas CEO John A. Challenger. "In 2001 and 2002, October was the largest job-cut month in the fourth quarter."
While year-end layoffs may be par for the course, the jump in unemployment could have an adverse effect on an economic recovery. According to the most recent layoff report from the US Bureau of Labor Statistics, 868 employers initiated mass layoffs in September. A mass layoff is defined as involving 50 or more workers at once. The total number of workers involved was 82,647.
The manufacturing sector alone accounted for 31 percent of all mass layoffs and 38 percent of all initial employment claims filed in September.
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