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Job Cuts More Widespread Than Initially Reported

December 5, 2008
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Employers have slashed nearly 1.9 million jobs since the recession officially began one year ago, with the majority of these cuts taking place in the last three months, according to the latest Labor Department data released Friday, December 5.

The recent acceleration is leading some to predict that employers are just getting started and that a massive wave of job cuts will continue well into next year.

“As corporations attempt to put some balance back in their balance sheets, many are finding that the only way to do this is to start cutting staff—and in big numbers—right now,” said Madeline Schnapp, director of macroeconomic research at TrimTabs Investment Research.

That’s evident in the latest jobs report, which showed employers cut 533,000 positions in November, the largest loss for a single month since December 1974. Schnapp predicted employers will continue to drastically reduce headcounts and said companies could eliminate anywhere from 1 million to 1.5 million more jobs through the end of February.

“Employers are saying, ‘If we’re going to do this, let’s do this and get it over with,’ ” she added.

Along with the 533,000 cut in jobs that the Labor Department reported for November, it revised its previous estimates of job losses for both September and October.

Instead of the 284,000 cuts it previously estimated took place in September, the Labor Department is now reporting that employers actually shed 403,000 jobs during the month—a 41 percent increase over its original projection. For October, the Labor Department now says 320,000 positions were eliminated, a 33 percent spike from the 240,000 it reported previously.

All told, 1.26 million jobs have been cut over the last three months. That works out to roughly two-thirds of the total number of payroll positions eliminated in 2008.

The latest reductions brought the unemployment rate to 6.7 percent in November, up from 6.5 percent in October.

Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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