The bottom falls out on jobs

January 30, 2009

Elizabeth Schulte reports on the job cuts that hit this week at a host of U.S. corporations.

DURING ONE terrible day this week, some 75,000 workers lost their jobs, with Home Depot, Caterpillar, Sprint Nextel, and at least eight other companies announcing big layoffs.

On January 26--which became known as Bloody Monday as news of the job cuts spread--Caterpillar said it was cutting nearly a fifth of its global workforce. The company said it had already slated 15,000 workers for layoff, but on Monday, it added another 5,000 people to the list.

The drug-maker Pfizer announced it was buying out its competitor Wyeth in a $68 billion cash-and-stock deal. It also announced it was slashing 8,000 jobs--some 10 percent of its current workforce--and closing five manufacturing plants.

The same day, Texas Instruments said it would cut its workforce by 12 percent. Sprint Nextel said in a press release that it would eliminate 8,000 workers by March 31.

The news got worse as the week continued. More layoff announcements came on Wednesday--at Ford, Boeing, Cessna, Starbucks, Allstate, Dell and others. This brought the total of lost jobs in one week to nearly 100,000.

Job seekers wait in line at a Los Angeles job fair

On Thursday, the Labor Department announced record numbers of people were receiving unemployment insurance benefits--4.8 million, the highest number since 1967. It also said that 1.7 million more people were receiving unemployment benefits as part of the Emergency Unemployment Compensation program passed last year in Congress, bringing the total number of people receiving benefits to about 6.5 million.

Even before this rotten week, according the Bureau of Labor Statistics (BLS), the U.S. economy had lost more than 2.5 million jobs since the recession began, pushing the unemployment rate up to 7.2 percent last month.

According to a BLS report on mass layoffs--meaning layoffs of more than 50 employees at a single employer--released on January 28, companies reported 2,275 mass layoffs involving 226,117 workers in December.

Retail workers are being hit hard. As the New York Times reported, "After the worst holiday shopping season in decades, retailers are letting employees go in droves. More than 66,600 retailing jobs were lost in December, the worst period since the late 1930s."

Home Depot announced Monday it would cut 7,000 jobs, or 2 percent of its workers. Most of these jobs will come as stores close--largely Home Depot's upscale Expo chain.

After news of the layoffs came, Chris Toliver, who works at an Expo store in the Westwood neighborhood of Los Angeles, told the Los Angeles Times that he was shocked. "It's just 7,000 of us, just gone," Toliver said. "I'm young. I'm 22. But what hurt the most is the people in their 40s or older, people with families, who are losing their jobs here. Unemployment is nowhere near enough to feed a family."

The jobs massacre also hit workplaces where workers could expect to stay in their positions until they retired.

At Caterpillar, some 8,000 people who are losing their jobs are temporary or contracted workers--11,500 are full-time. In addition to layoffs, Caterpillar officials say they plan to reduce overtime and reduce the workweek at some plants--cutting into workers' wages.

Already, years of a two-tier wage system at Cat--with new hires earning significantly less, and older workers being phased out--has slashed the standard of living for workers.

ONE STORY this week from Los Angeles serves as an extreme example of the impact of the economic crisis. Though they weren't the victims of layoffs, when Ervin Lupoe and his wife Ana were fired from their jobs at Kaiser Permanente hospital, it was more than they could bear.

Ervin shot his wife and five children and then turned the gun on himself, after sending a message to a local TV station. In the letter faxed to KABC-TV, Ervin--whose family was drowning in debt and losing their home--explained that after a dispute with a hospital manager in which they lost their jobs, the couple showed up to work.

Ervin said that an administrator told them, "You should not even had bothered to come to work today, you should have blown your brains out." Ervin wrote:

So after a horrendous ordeal, my wife felt it better to end our lives, and why leave our children in someone else's hands. In addition, it seems Kaiser Permanente wants us to kill ourselves and take our family with us. They did nothing to the manager who stated such, and did not attempt to assist us in the matter, knowing we have no job and five children under 8 years with no place to go. So here we are.

According to police officials, the couple was fired after it was discovered that they had understated their income on an application for child care in the hopes of getting less expensive rates.

The BLS released another report this week, noting a small but welcome increase in the percentage of workers in unions after a 25-year decline--the number of workers who belong to a union rose by 428,000 to 16.1 million in 2008.

The report showed that when workers have the opportunity to join unions, they do.

But the other part of the picture painted in the report was that the workforce as a whole is shrinking, with unionized workers making up a large portion of those who managed to keep their jobs. Jim Walker, a BLS economist who worked on the new figures, pointed out, "Part of what I think is happening is that the economy is shrinking, but union jobs are not being shed because they have union contracts."

In other words, when workers are organized, they have an important tool with which to begin to fight against layoffs. That's why we have to fight to make joining unions easier and strengthen unions where they do exist.

Recent articles

Thursday, January 17th

Wednesday, January 16th

Tuesday, January 15th

Monday, January 14th

Friday, January 11th

Thursday, January 10th

E-mail alerts

Further Reading

Today's Stories

From the archives