Ford Motor Company and Dow Chemical Company are just two of a growing number of Fortune 500 companies that are laying off workers at record rates. Just since September 1st, North American companies have announced they are firing more than 60,000 workers, the biggest drop since the start of 2010 (when the Great Recession was supposed to be in recovery). So far this year nearly 160,000 workers have lost their jobs in these companies, 30,000 more than those who were fired over the same period last year.
To add to the misery, earnings reports over the past weeks have been sobering: out of 204 companies reporting so far, 120 of them have reported that sales were below analysts’ expectations. This is a precursor to additional layoffs, according to John Challenger, head of Challenger, Gray & Christmas, Inc., the oldest executive outplacement firm in the country.
Said Challenger, sales misses are “a sure prescription for layoffs starting to heat up as companies take immediate action to show their shareholders how responsive they are.”
Hewlett-Packard’s announcement that it was laying off 29,000 of its workers exceeded its initial estimates, and Bloomberg said that banks are planning to eliminate another 19,000 positions as the economy continues to falter.
Even one of the bright spots in the BEA report — that consumer spending in the third quarter had exceeded experts' expectations — was dampened when it was revealed that that spending came out of savings.