2002 shaping up as big year for job cuts

By Brendan Murray
Bloomberg News Service

WASHINGTON — U.S. job-cut announcements rose 46 percent in August from the previous month, according to a private survey.

Businesses last month outlined plans to eliminate 118,067 jobs, compared with 80,966 in July and 140,019 in August 2001, according to Challenger, Gray & Christmas Inc., a job-placement firm in Chicago.

"Job creation remains very low, capital spending is still virtually nonexistent and there is nothing really moving to give this economy traction," John Challenger, the outplacement company's chief executive officer, said in a statement.

So far this year, companies have announced 934,560 reductions, lower than the 1.1 million cuts announced through August last year, the survey showed. Announcements this year are on pace to be the second-worst, after last year, since the survey began in 1989.

"As companies wait for this elusive rebound, they will continue to eliminate jobs to preserve whatever profits they have been able to achieve," Challenger said.

Retailers announced plans to eliminate 22,992 jobs, the most of any industry in the Challenger survey for August.

Telecommunications companies announced last month they plan to cut 12,565 jobs, and computer makers said they would eliminate 12,877. Telecommunications firms have announced 198,601 job cuts this year, while retailers account for 111,499 cuts, the survey showed.