Coming up three years since the end of the Great Recession, the economy has oncly recovered about half of the nearly 8.8 million jobs lost. While some modest hiring has occurred, the gains have bee offset in part because many companies are still in a downsizing mode. The latest major layoff announcements have come from Nokia Corp., Lockheed Martin Corp. and Roche.
According to outplacement firm Challenger, Gray & Christmas, the private sector has managed to string together 27 consecutive months of net payroll gains totaling 4.3 million new jobs, which has not been nearly enough to make a much of a dent in unemployment.
Also unfortunately, there are no signs of an imminent hiring boom, the firm said. The latest NFIB survey of small businesses, which are critical to job creation, found that business owners expect the U.S. economy to get somewhat worse instead of better over the next six months.
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Further signs of sub-par hiring expectations can also be seen in survey results released this month by Manpower, which showed that while hiring prospects have improved slightly in the U.S., companies report that they will only add workers "when they have to."
Right now, though, major companies are still downsizing.
Nokia this month outlined a range of planned actions aimed at improving its operating model and returning the company to profitable growth. Nokia intends to reduce its 'device and services' operating expenses, substantially reduce its headcount and reduce its factory footprint.
Nokia plans to reduce up to 10,000 positions globally by the end of 2013.
Lockheed Martin is also looking at downsizing.
The U.S. Department of Defense has committed to reduce spending by $487 billion over the next decade with $47 billion of that reduction occurring in the year starting Oct. 1, 2012.
"We have been responding to this challenge by reducing our overheads, cutting capital expenses, curtailing research and development, consolidating facilities, and engaging in very painful but necessary reductions in force across our company," Robert J. Stevens, chairman and CEO of Lockheed Martin, said in a speech last week. "We understand the need to address our nation's fiscal challenges and we are very much doing our part. Over the past few years, we have reduced costs by billions of dollars. We've removed a million and a half square feet from our facilities' footprint and we will reduce another 2.9 million square feet before the end of 2014."
"Today our workforce is 18% smaller than it was just three years ago and the pace of our hiring has slowed considerably," Stevens said.
"With only 196 days remaining [in the current fiscal year], we have no insight as to how sequestration, this law, will be implemented … which programs will be curtailed; which sites will be closed; which technologies will be discontinued; which contracts will be reformed; which suppliers-particularly our small business participants, who are so vital to our supply chain-will be impacted; and certainly most tragically, how many people are going to be affected. How many dedicated employees are going to lose their jobs? How many families are going to be disrupted," Stevens said. "I suspect that on one level it might be flattering to believe that our industry is so robust, so durable, so as to absorb the impact of sequestration without breaking stride. But this is a fiction."
Then lastly, Switzerland-based Roche plans to consolidate activities within its Research and Early Development division. As a result, Roche's 2 million-square-foot site on Kingsland Street in Nutley, NJ, will be closed and research and development activities will be consolidated at the existing sites in Germany and Switzerland. Closure of the Nutley site is expected to result in a reduction of around 1,000 positions. The transfer of business operations in Nutley is planned to be completed by end of 2013.
Some of that sting will be mollified as Roche also said it is in the process of identifying a site on the East Coast for a new Translational Clinical Research Center. This new center is expected to host around 240 employees and be operational by early 2013.
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