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A big year for layoffs
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December 2, 1998: 8:08 p.m. ET
Experts predict 625,000 workers could lose their jobs this year
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NEW YORK (CNNfn) - On Wall Street, the U.S. economy has often been compared to a supertanker, steaming through treacherous waters with ease. But in many cities across America, the supertanker appears to be springing a few leaks as thousands of workers receive pink slips.
Just this week, more than 64,000 people, the majority of them in the United States, have been told they will lose their jobs in coming months because their companies have decided to cut costs in the interest of restructuring, fostering growth or increasing shareholder value.
And that's only a portion of the layoffs that have been announced so far this year. In fact, job cuts are currently on track to make 1998 the worst year of the decade, as companies continue to cut costs to weather the global financial crisis.
"The market has very high expectations. The unrelenting search for profits is driving companies in an era when they can't raise prices and some of their potential for expansion overseas is being crimped," said John Challenger of Challenger, Gray & Christmas, a firm that helps downsized workers find new jobs.
Job cuts in 1998 are looking to beat 1993, the worst year of the decade so far, according to Challenger. He said job cuts could reach the 625,000 mark by the end of the year.
The following is a list of the latest cutbacks:
Citing the impact of the Asian financial crisis on air travel, aerospace giant Boeing Co. (BA) said it will eliminate 48,000 jobs over the next two years as part of its plan to curtail airplane production. The job cuts total 20 percent of Boeing's work force, and reduce the company's payroll to 190,000 employees.
Exxon's (XON) purchase of Mobil (MOB) in what will be the biggest merger in U.S. history will result in a loss of about 9,000 jobs worldwide, the companies said. The reduction accounts for approximately 7 percent of the companies' global work force combined.
Industrial parts maker ITT Industries Inc. (IIN), which employs about 35,000 people internationally, said it will be slicing up to 1,200 jobs and taking a one-time charge of between $370 million to $400 million to pay for its company-wide restructuring.
Kellogg Co. (K), the world's largest cereal maker, said it will eliminate 765 jobs, or about 4 percent of its overall global work force, and take a pre-tax charge of $70 million in the current quarter in a bid to bolster growth in its ready-to-eat cereal businesses and expansion of its convenience food lines.
Swedish automaker Volvo said it will be slashing about 5,300 jobs worldwide as it shuts four production and assembly plants in Europe and Canada in a bid to boost earnings. The layoffs represent about 6.7 percent of the company's 79,000 jobs, about half of them in Sweden with the rest spread through Europe and Canada.
What is happening, according to Joel Naroff, an economist with First Union Corp. based in Philadelphia, is companies are "finally throwing in the towel as far as holding things together and hoping that the effects of Asia or Latin America will not require them to do the kinds of downsizings that they're required to do."
"The fundamental decision to cut the work force is needs-based," as companies must respond more quickly to changes in the global economy," he said.
While layoffs are increasing, unemployment has stayed fairly low, economists noted. "In the best of times there are 300,000 new claims for unemployment insurance," said Michael Boldin, the director of business cycle research for the Conference Board, a New York-based research firm. New claims have recently been between 300,000 and 325,000, he said.
This means that individual workers have had to become more flexible, with corporations quicker to hire as well as to fire in response to changing economic conditions.
"People are moving to where the jobs and the growth are occurring. That means a lot more turbulence in people's lives," Challenger said.
According to First Union's Naroff: "Job security is not something you even talk about anymore. It is now more defined as the ability to walk across the street and get another job.
It may mean a pay cut, it may mean giving some things up. For a lot of these people, it's not nearly as catastrophic as if the job market were not so tight." 
-- from staff and wires
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