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The Honolulu Advertiser
Posted on: Thursday, February 5, 2009

No slowdown foreseen in job losses

By Martin Zimmerman
Los Angeles Times

Jobs disappeared at an accelerating pace in January as a dismal holiday shopping season brought more gloom to the United States' battered retail sector, according to a report released yesterday. And a fresh round of layoff announcements brought little hope for a quick turnaround.

U.S. companies announced 241,749 layoffs last month, Chicago employment firm Challenger, Gray & Christmas Inc. reported. That was the highest one-month layoff total since January 2002 and 222 percent higher than the 75,000 job cuts announced in the first month of 2008, the firm said. It was the fourth-highest total since the firm began tracking layoff announcements in 1993.

Although retailers topped the list with announcements of almost 54,000 job cuts, the report noted that the job losses are spreading through other areas of the economy.

"The variety of industries represented among the top five job-cutting sectors in January is further evidence of how far the impact of this recession has spread," said John A. Challenger, chief executive of Challenger Gray. "Industries that at first appeared to be immune to downturns, such as computer and pharmaceutical, are now rapidly shedding workers."

And there are few signs that the employment picture will brighten any time soon, despite efforts in Washington to cook up a plan to put people back to work.

Just this week, department store operator Macy's Inc. said it planned to cut 7,000 jobs in anticipation of a sluggish retail environment throughout this year. PNC Financial Services Group said it plans to cut 5,800 jobs, and airplane maker Hawker Beechcraft Corp. said 2,300 employees will lose their jobs before the end of the year and warned more layoffs may be coming.

Adding to the toll yesterday was news of 460 layoffs at Botox maker Allergan Inc., 1,500 at title insurer Fidelity National Financial Inc., 1,250 at Time Warner Cable Inc., 600 at video game maker THQ Inc. and 1,000 at Hudson's Bay Co., Canada's largest retailer. Investment firm Pacific Investment Management Co. of Newport Beach, Calif., and Lazard Ltd., one of the last big investment banks left on Wall Street, also announced staff cuts.

"Unfortunately, there is no light at the end of the tunnel yet," Challenger said. "Even if the stimulus package is successful, it could take months to make a noticeable impact on the employment picture."

The report adds to recent glum news about the U.S. job market. In December the nation's unemployment rate hit 7.2 percent as the number of jobs lost during 2008 hit the highest level since 1945. And last week, the number of workers filing for jobless benefits hit an all-time high of 4.78 million.

Firms have been shedding jobs in reaction to the worst economic downturn since the early 1980s. The twin calamities of a collapsing housing market and a global credit crisis have put the clamps on spending by businesses and consumers alike. As orders dry up, companies trim payrolls to cut costs. As workers lose their jobs or worry that they might, they cut back on spending, which continues the cycle.