More job cuts expected

By Siobhan Hughes
Bloomberg News Service

WASHINGTON — Job cuts announced by U.S. companies rose by a third in January, led by retailers and transportation firms, a sign the unemployment rate may keep rising through mid-year, a private survey found.

Businesses announced plans to eliminate 212,704 jobs last month, up 32 percent from 161,584 in December, according to the job-placement firm Challenger, Gray & Christmas Inc.

It was the first increase in four months and the third-largest on record.

"There have been indications from major companies that significant work force reductions may be announced in coming weeks and months," said John Challenger, chief executive of the Chicago company. "Those plans may change depending on how the economy performs, but right now it would appear that more significant job-cut months may be in store."

Tenneco Automotive Inc., Ford Motor Co., and Toys "R" Us Inc. were among companies that announced layoffs last month. Ford's decision to cut 35,000 jobs — the fifth-largest payroll reduction by a U.S. company in the past decade — helped push automotive layoffs up to a record 43,035 in January, the private group said.

Compared with January 2001, job cut announcements rose 50 percent from 142,208. That was still less than the 181 percent increase from January 2000 to January 2001. January is a month of larger-than-usual layoffs because that's when stores release temporary workers hired for the holiday shopping season.

Among retailers, planned job cuts totaled 24,778, up from 15,344 during the same month last year.

By region, announced job cuts totaled 87,411 in the East, led by New York, and totaled 77,667 in the Midwest, led by Michigan. In the West, companies announced 29,682 job cuts, while in the South, firms made plans to eliminate 17,944 positions.

Job-cut announcements aren't the same as firings because many of the planned job cuts will be carried out through attrition or early retirement. Some employees find work elsewhere in their companies, and many announced staff reductions never take place because business improves.

The unemployment rate fell to 5.6 percent in January while the economy lost 89,000 jobs, the sixth straight month of job losses, the Labor Department reported last week.