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1998 layoffs near high
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December 28, 1998: 4:24 p.m. ET
Merger mania prompts job cuts, but employment outlook remains strong
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NEW YORK (CNNfn) - The number of pink slips received by workers could reach record levels in 1998, as deregulation, mergers and the Asia crisis prompted many companies to dole out pink slips this year.
Currently, 1998 figures lag those of 1993, when 615,189 jobs were cut, according to the employment placement firm Challenger, Gray and Christmas. But with 574,629 layoffs through November, 1998 appears on track to report the largest number of job cuts this decade.
The increase in job cuts is not, however, a sign of hard times ahead, as unemployment remains generally low.
"Companies are much more nimble today," said John Challenger, chief executive of Challenger, Gray. "They're cutting costs, but then they grow in new areas, so layoffs continue at the same time as job growth."
The deregulation of many industries, including telecommunications, banking and aerospace, greatly contributed to layoffs.
Deregulation is "really causing a lot of change, as companies that were once protected -- even if they didn't do very well - can't compete in the new environment," Challenger said.
The surge in the number of mergers and acquisitions in 1998 also took its toll on the workforce. Companies struggling to compete, as well as meet high earnings expectations, often saw layoffs as a way to cut costs.
And dismal economic circumstances in the Pacific Rim induced many cuts, as companies sought to make up for Asia-related losses.
"The Asian situation has been a real driver and should continue into 1999, as companies scale back their growth plans," Challenger said.
The holiday season has done little to curb the trend, with three major firms announcing more job cuts Monday.
Auto parts maker SPX Corp. said it will cut 1,000 jobs as a consequence of its $2 billion acquisition of General Signal.
Additionally, air freight carrier Kitty Hawk Inc. announced it will lay off at least half of the 2,700 employees at its American International Airways unit and electrical products firm Cooper Industries Inc. said it will slash 1,000 employees from its workforce. 
--by staff writer Nicole Jacoby
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