It's the year of the axe with companies axing more than 75,000 jobs, led by Caterpillar which is sacking 20,000. For a good breakdown, check this little table from the Financial Times.
The news everywhere looks bad. American Express earnings have fallen 79%, a sure sign of the credit crisis with slowing consumer demand and rising delinquencies. With declining demand for flights and a falling pound, British Airways report a third-quarter loss of about 50 million pounds ($US69.9 million) and will probably will have an operating loss of about 150 million pounds for the fiscal year ending March 31, reports Bloomberg. Meanwhile, Smufit-Stone Container Corp which is one of the largest packaging companies in the United States has filed for Chapter 11 protection, prompting Andrew Willis in the Globe and Mail's streetwise blog to ask whether it's a sign of things to come of more companies jumping the gun and taking radical steps to deal with their debt problems.
Rather than sacking, more companies are likely to put their workers on shorter weeks. The British Government is considering plans to pay firms to cut the working hours of thousands of staff instead of retrenching them, according to this report. KPMG in Britain is already offering staff four day weeks to avoid sackings, and Siemens is moving in the same direction. And while France's conservative government has gutted that nation's famous 35 hour week, most French corporations are sticking to it. As Time Magazine reports, it's a useful tool for dealing with the economic downturn.
Get ready for more. Many companies will be cutting their workers' hours this year in order to stay afloat.
Hat’s off to the UK government forgetting it right (for once!), in encouraging firms to cut hours rather than make staff redundant!