NEW YORK (CNN/Money) – Time was, getting laid off was news.
These days, finding a job makes headlines.
Employers slashed 146,399 jobs in April - the highest levels ever since November 2002, according to the most recent report by Challenger Gray & Christmas. More disturbingly, the Challenger report indicates that even so-called growth industries that have offered havens for job-seekers -- such as health care and defense -- have been shaken, too.
|Industry ||Total losses |
|Government/Nonprofit ||57,927 |
|Telecommunications ||11,397 |
|Industrial Goods ||9,614 |
|Consumer Products ||7,077 |
|Commodities ||6,995 |
|Transportation ||6,994 |
|Aerospace/Defense ||6,820 |
|Financial Services ||5,817 |
|Automotive ||5,294 |
|Health Care ||4,201 |
| Source: Challenger, Gray & Christmas, Inc.|
All totaled, private-sector employers have shed 2.6 million jobs since March 2001, when the recession officially began, and the national unemployment rate in April just climbed to 6 percent with 8.8 million individuals counted as "officially" unemployed.
In fact, there are 1.4 million unemployed individuals not counted in the government's official unemployment number because they have not actively looked for work in the past month. Many of these individuals are simply discouraged and no longer believe there are jobs available, according to the Bureau of Labor Statistics.
It's unlikely that things will turn around quickly. Though one in five employers -- 22 percent -- hope to add to their payrolls, 9 percent plan to trim jobs in the second quarter of the year, according to the latest survey by Manpower International.
"After a bit of an increase in hiring in 2002, we're seeing it go the other way," said Manpower CEO Jeffrey Joerres. "My feeling is that companies are still very jittery of profit projections and therefore will still reduce their staff. It doesn't mean they won't be hiring. But they may hire five and let go six."
Here's what's going on:
Forget what you've heard about cushy government jobs. These days, public sector employees are leading the way in layoffs. Job losses in the public sector totaled 40,000 losses last month. Combined with non-profit losses, losses from the public and non-profit sectors totaled 57,925, the largest one-month total for a single category since September 2001, according to the Challenger report.
For workers, especially those in state government, the culprit boils down to massive deficits. Currently, states face budget shortfalls of $29 billion for the fiscal year 2003, which ends June 30, and a staggering $82 billion for FY 2004, which starts July 1, according to the National Governors Association. Moreover, "rainy day" funds to bridge gaps already have been spent.
|JOBLESS IN AMERICA
Not surprisingly, when the National Association of State Budget Officers surveyed states last fall on the health of their finances for the coming year, 10 states said that they'd lay off staff for the fiscal year 2003 -- which began July 1, 2002, and runs until June 30, 2003. Meanwhile, 11 states would offer retirement packages and work furloughs to trim costs.
NASBO expects more layoffs, furloughs, and retirement deals to follow. "I would expect that for many states public employment will decrease either through layoffs or early retirement packages because the financial situation looks so bad. You can't help but assume that," said Scott Pattison, the organization's executive director.
Turbulence for airline employees
Meanwhile, tourism and travel industries are suffering for several reasons, not the least of which include a dismal economy, fears of terrorism, the war, and travelers' concerns about contracting the SARS virus.
Airlines, not surprisingly, have been particularly hard hit. Sure, cheap-fare upstarts like Jet Blue and Southwest are flying high. But two of the Big 6 major U.S. carriers are in bankruptcy, and the others are teetering. Some 177,000 jobs have been cut since January 2001, when airline jobs hit their peak. And this year, airlines have already lost $4 billion.
Total losses will reach $10 billion by year's end, according to a recent report from International Air Transport Association.
Last month, some 6,944 jobs were lost in various transportation industries.
Employees such as machinists, pilots and flight attendants are feeling the pain acutely.
Even if they don't get pink slips, workers are being asked to agree to pay cuts and other concessions. For example, Northwest Airlines recently informed its employees that it wants to cut wages and benefits by $1 billion annually. American airlines skirted bankruptcy after its unions and flight attendants agreed to concessions of $1.6 billion, a give-back that means more than 7,000 employees will lose their jobs.
Other travel-related industries have suffered, too. Jobs at amusement parks, hotels, and other recreation services dropped by 61,000 jobs in April.
Telecommunications workers have been battered for years - and the pain isn't quite over yet. The industry lost 11,397 jobs in April.
That said, it could have been worse, said Tim Bajarin, president of Campbell, Calif.-based Creative Strategies Inc., a Silicon Valley market researcher, who says that telecom and technology have seen the worst of the cuts.
Major companies like Intel and Hewlett-Packard "have pretty much bottomed out on cutbacks," Bajarin said. "I just don't if we're ready to see very strong hiring" in the immediate future.
These days, those who are finding jobs are IT staffers that can get involved in projects regarding "next generation" servers.
"Eventually we'll get back into desktops and laptops, and then applications to Web services will force companies to hire more programmers over time," said Bajarin. "But this will be an 18- to 24-month process."
Meanwhile, it's a mistake to think that days of cuts have completely ended. Some companies have had to announce layoffs, not once or twice – but many more times.
Take Columbia, Md.-based Corvis Corp., which makes fiber-optic equipment. It just announced that it was cutting another 150 jobs. It's the seventh time Corvis has announced layoffs. When the latest round hits, the company will have about 350 workers, down from 1,625 employees back in 2001.
"We've been subject to the telecom slowdown," said company spokesman Kevin Coyne. "We believe the steps we've taken and continue to take will better position the company to navigate the difficult spending environment."
Things continue to fare very poorly for those in manufacturing jobs. In fact, some 95,000 manufacturing jobs were lost in April, more than twice the average monthly decline the sector has seen in the previous year, according to government findings.
Losses in the automotive industry accounted for about one-quarter of the job cuts in April. The automotive industry shed another 5,294 jobs in April. That brings the industry's total losses to 150,000 job cuts since June 2000, when hiring was at peak levels. Paper producers, as well as lumber, metals, textiles, and apparel makers saw job losses in April that exceeded typical number of cuts made in the previous 12 months, government findings show.
"Manufacturing keeps taking it on the chin and this recession has now been three years running in job losses," said John Challenger, CEO of Challenger Gray & Christmas. "We may be seeing a real move away from a manufacturing economy to a services economy in this recession."
Two labor markets that have doing well - health care and real estate - actually saw losses in April.
In fact, the health-care industry was among the top 10 in terms of losses, with some 4,201 jobs cut. Nevertheless, Challenger says that health-care jobs for nurses, pharmacists, radiologists, lab technicians and others are still plentiful and the industry is one safe harbor for job seekers.
In many cases, employers can't offer fat salaries to attract workers. So recruiting efforts need to be creative and flexible, as well.
"We need people to go into health care," said Peg Brubaker, vice president human resources support services at N.Y. Presbyterian. "Many nurses we've talked to have said they wanted technology. One of the things health care has is a lot of cutting-edge technology and we can sell that."
The real estate industry shed just 40 jobs nationwide, less than any other sector. In fact, most jobs are plentiful, thanks to the continued housing boom. Some 11,000 mortgage bankers have been hired since January, according to the Bureau of Labor Statistics. And there are currently some 1.56 million real estate employees working, the highest levels ever, BLS studies show.
Meanwhile, construction employment grew as 18,000 slots were filled in April alone. And since July 2002, general contractors for residential building projects have accounted for 39,000 new hires.