More than 80,000 jobs cut in just five days

More than 80,000 job losses were announced around the world this week as the global recession tightened its grip in virtually every business sector.

A Financial Times study of company announcements, press briefings and union statements over the past five working days reveals the spread and depth of the downturn.

Jobs have haemorrhaged from businesses as diverse as a Chicago kosher hot dog factory, a German airline and car plants in Japan. Companies have been forced into savage cost cutting as the effects of the credit crunch have sapped confidence and sent order books and commodity prices plummeting.

Almost 30,000 job losses have been announced by British companies alone in the past two weeks.

Richard Adkerson chief executive of Freeport-McMoRan Copper & Gold, the world’s largest publicly traded copper producer, which is cutting more than 600 jobs in the US, said: “We’re running our business on the basis of being prepared to live with low commodity prices for an extended period.”

More than half the job losses this week, were announced by Citigroup, the US bank, which has increased the number of staff it is making redundant to 52,000.

But even without Citigroup, businesses around the world announced job cuts at the rate of more than 5,500 a day. Economists expect worse to come as output falls in developed countries and growth continues to slow in emerging markets such as China and Russia.

Carmakers and their suppliers, from component manufacturers to steel producers, have been particularly badly hit, prompting producers in the US to seek a government bail-out.

Toyota, Japan’s biggest carmaker announced on Friday that it was cutting its domestic temporary workforce by 50 per cent, or 3,000 jobs. Mazda is not renewing contracts for 1,300 temporary staff while Isuzu, the Japanese truck manufacturer is scaling back production with the loss of 1,400 temporary and contract workers. Temporary and part-time workers account for about a third Japan’s workforce. Asian business centres are also starting to feel the backlash of big job cuts announced by international banks this year. HSBC was reported this week to be cutting 500 jobs, the bulk of them in Hong Kong. Morgan Stanley handed notices to about 100 of its 1,700 Hong Kong staff while Standard Chartered is eliminating 527 jobs at its main office in South Korea.

European job losses are also mounting. On Thursday alone, AstraZeneca, the Anglo-Swedish drug manufacturer announced that it was cutting 1,400 jobs and closing plants in Spain, Sweden and Belgium; Rolls Royce, the UK jet engine manufacturers, planned to cut 2,000 jobs worldwide; Sandvik of Sweden, the world’s largest manufacturer, announced that it was axing 2,300 jobs; Voestalpine, Austria’s biggest steelmaker, said it would not be renewing contracts for 2,100 temporary staff and Peugeot Citro├źn, the French carmaker, said it was cutting 2,700 jobs.

Air France-KLM also revealed that it was postponing taking delivery of new fuel-efficient aircraft with the group preferring to hold on to its cash. Global airline-passenger traffic, according to the International Air Transport Association, dropped in September in the first fall for five years.

Air New Zealand announced plans to axe 200 jobs this week while Deutsche Lufthansa is cutting about 500 staff at its regional carrier CityLine.

In the US, where the number of Americans filing for unemployment benefits is highest for a quarter of century, jobs are being cut in almost every sector.

In addition to the continuing flow of redundancies at financial services companies, job losses were announced this week at Pepsi Bottling Group (3,150 jobs to go of which 750 are in North America); Lam, the San Francisco chip equipment manufacturer (600); Pilgrim’s Pride, the largest US chicken producer (335); Boeing’s defence manufacturing plant at Wichita Kansas (800); International Game Technology, which manufactures computerised gaming machines (460); and Sara Lee which is closing a kosher hot dog and meat processing facility in Chicago (185).

There are thousands of other jobs being cut at small businesses. According to figures from Automatic Data Processing the world’s largest payroll processing company, small businesses in the US employing 49 or fewer people lost 25,000 jobs in October.

By Andrew Taylor in London
Published: November 21 2008 17:50

Source: Financial Times

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