Job loss tally ticks higher
In the third week of January, companies from Warner Bros. to Microsoft add to latest job cut news.
NEW YORK (CNNMoney.com) -- The third week of January was dismal for jobs, as around 40,000 more cuts were announced across multiple industries.
"This type of job loss is part of what defines a severe recession," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute.
The week got off to a slow start with the Monday holiday, but on Tuesday, Time Warner Inc.'s (TWX, Fortune 500) Warner Bros. Entertainment said it would cut about 800 jobs, or 10% of its worldwide staff in the upcoming weeks. In addition, Chemical maker Rohm and Haas Co. said it would reduce another 900 positions.
Wednesday was a particularly brutal day for the job market. A wide range of companies, including Ericsson, mining company BHP Billiton (BHP), Clear Channel Communications, Eaton, UAL Corp (UAUA, Fortune 500), Intel (INTC, Fortune 500) and Williams-Sonoma announced job cuts totaling over 27,000 positions.
On Thursday, Microsoft (MSFT, Fortune 500) unveiled its plan to cut up to 5,000 jobs in the next year and a half, or 5.5% of its global workforce, and chemical manufacturer Huntsman said it would cut 1,175 jobs worldwide.
To wrap up the week, Harley-Davidson said Friday it will cut 1,100 jobs over two years because of a weak motorcycle market. Polaris Industries, which makes snowmobiles and motorcycles, also announced cuts on Friday.
"It's quite clear that businesses these days are focused on survival," said Bernard Baumohl, chief economist at the Economic Outlook Group.
"Even some companies that didn't seem distressed, like Microsoft, are laying people off," Achuthan noted, "and that raises eyebrows."
All in all, about 125,000 job cuts have been announced so far this year, according to company reports.
"The first quarter looks almost as bad as the fourth quarter [of 2008]" according to David Wyss, chief economist at Standard & Poor's.
Nearly 2.6 million jobs were lost over the course of 2008, the highest yearly job-loss total since 1945. And January's job cut news does not bode well for the job market in 2009, economists say.
"Things are looking pretty bad and they're not going to get better anytime soon," Wyss said.
The official unemployment rate now stands at 7.2%, a 16-year high, according to the Labor Department. And economists expect it to get worse before it gets better. "We're going to see job losses intensify in the next few months which will put strong upward pressure on the unemployment rate," Achuthan said.
Wyss predicts that the unemployment rate will hit 9% by this time next year. Baumohl said the unemployment rate will rise as high as 9.1% in the first quarter of 2010 and then begin to drop off gradually.