Job cuts mount as year-end nears

Nearly 2 million jobs have been lost through November, while AT&T, Credit Suisse and others announce more than 34,000 cuts in the first week of December.

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By Aaron Smith, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- The nation's job market was dealt a savage blow this week as a slew of companies announced more than 34,000 layoffs, and the government reported that nearly 2 million jobs have been lost this year, through November.

On Friday, the Labor Department said that employers hemorrhaged 533,000 jobs in November, the largest monthly loss since December 1974. This was much worse than the 325,000 expected by a consensus of economists surveyed by Briefing.com.

The annual unemployment rate also increased to 6.7% in November, from 6.5% the prior month.

"With the loss of over half-a-million jobs just last month, the U.S. job market is now shedding jobs at a truly alarming rate, a rate that is measurably worse than past recessions," said Jared Bernstein, senior economist for the Economic Policy Institute, in an e-mail to CNNMoney.com.

The government also revised up its losses for the prior two months, to 320,000 for October and 403,000 in September. In total, it reported job cuts of 1.9 million for 2008, through November.

Those losses exceed the 1.5 million job cuts that occurred in a 12-month span from 1990 to 1991, according to information from David Wyss, chief economist for Standard & Poor's. But Wyss said the current unemployment rate pales in comparison to 1982, when the rate was nearly 11%.

"I don't think this is the 1930s, but it's certainly the worst recession we've seen since 1982," Wyss said in an interview on Thursday.

Job cuts continue to mount in December. Thursday was particularly bloody, when 11 companies announced 24,914 layoffs, according to Challenger, Gray & Christmas and company reports.

Then on Friday, engine-maker Cummins said it would eliminate at least 500 white-collar jobs by the end of 2008, and General Motors (GM, Fortune 500) released plans to lay off 2,000 workers next year.

And this is just the latest bit of bad December job news. On Wednesday, State Street Corp., Jefferies Group and The Carlyle Group announced job cuts totaling about 3,000. On Tuesday, U.S. Steel said 3,500 workers will be "affected" by the "temporary idling" of manufacturing facilities in Keewatin, Minn., and near Detroit and St. Louis.

The total layoffs announced in the first week of December: 33,914.

The big 5 Thursday job cuts

AT&T (T, Fortune 500), a Dallas-based telecom operator, said it would slash 12,000 jobs, totaling 4% of its workforce.

AT&T attributed the staff cuts to "economic pressures, a changing business mix and a more streamlined organizational structure" in a news release.

The telecom also said it would take a charge of $600 million in the fourth quarter to make severance payments. It said it would reduce its 2009 capital expenditures from its 2008 levels.

Credit Suisse Group (CS) said it would cut 5,300 staff jobs, 11% of its worldwide work force, as part of a restructuring effort. The majority of the cuts would be to investment bank jobs, said Chief Executive Brady Dougan.

In addition, the Zurich, Switzerland-based company said it would eliminate 1,200 contractor positions.

DuPont (DD, Fortune 500), a chemical company based in Wilmington, Del., said it would cut 2,500 jobs.

DuPont Chief Executive Charles Holliday said his company was making the cuts "in response to current market challenges" and to increase the company's competitiveness in the coming year.

DuPont said it expected a loss of 60 cents to 70 cents per share for the fourth quarter, including an 40-cent-per-share charge from the company's restructuring plan. Going forward, the company expects full-year earnings to be $2.25 to $2.75 per share in 2009.

Full-year earnings of $2.75 to $2.85 are expected for 2008, said DuPont, down from its previously announced range of $3.25 to $3.30 per share.

Viacom Inc., (VIA) an entertainment company that includes MTV Networks and Paramount Pictures, said it would cut 850 jobs, or 7% of its workforce.

Viacom Chief Executive Philippe Dauman said it was restructuring its company "to adapt to the challenges presented by the current economic environment."

In addition to the job cuts, New York-based Viacom said it was suspending senior level management salary increases throughout 2009. The company expects the restructuring to result in pre-tax savings of $200 million to $250 million in 2009, but it will take a pre-tax charge of $400 million to $450 million in the fourth quarter of 2008, or 42 cents to 48 cents per diluted share.

Car rental company Avis Budget Group (CAR, Fortune 500) said it has cut more than 2,200 jobs and taken other steps to meet its goal of reducing annual costs by $150 million to $200 million by the middle of 2009. The company will close its claims-processing facility in Orlando, Fla., as well as its customer contact center in Wichita Falls, Texas.

Avis CEO Ronald Nelson said the company will continue its "relentless focus on cost containment" so that when economic conditions improve Avis can "achieve our ultimate goal of restoring our margins to previous levels." In the past weeks, Avis said it has frozen management salaries and downsized its planned fleet.

The Wednesday job cuts

This follows a slew of bad employment news on Wednesday, when State Street Corp. (STT, Fortune 500) said it was cutting from 1,600 to 1,800 workers, or 6% of its total workforce.

The Boston-based company, which provides financial services to institutional investors, said these job cuts would occur between now and the end of the first quarter of 2009. Two-thirds of the cuts will occur in North America, with the rest in Europe, Asia and the Pacific region.

Also on Wednesday, Jefferies Group (JEF) said it was shedding 18% of its work force throughout 2008, as part of a wider restructuring plan to "restore profitability in 2009." The investment bank said it planned to end the year with 2,150 staffers. That's 358 less than it started with. The company also said it was closing offices in Dubai, Singapore and Tokyo.

The Carlyle Group, a private equity investment firm based in Washington, said Wednesday that is laying off 10% of its work force, with most of the layoffs occurring in the U.S. offices. The Carlyle Group, has more than 1,000 workers, according to the company.

"The markets are terrible and we need to adjust accordingly," said Carlyle spokesman Christopher Ullman. "We're making the adjustments to deal with the current realities of the economy."

The future

Lakshman Achuthan, managing director of the Economic Cycle Research Institute, said in an interview on Thursday that the job losses are likely to drag into next year. But he said it's difficult to project how long the current recession will last, and when the job market will hit bottom.

"When we see the job losses and the job picture getting worse and worse and worse, it is confirming that the recession is accelerating, that it is intensifying to the down side, but it doesn't tell us where were headed in the future, said Achuthan, who focuses on leading indicators.

"The bad news doesn't stop with the fact that we're in an intensifying recession and that it's going to continue into 2009," said Achuthan. "The risk on the horizon is that the recovery, when it does come, will be a jobless recovery." To top of page

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