Lousy Jobs Report Follows a Rush of Layoff News

Scads of big-name companies announced layoffs in the past month

By Kyle Woodley, InvestorPlace Managing Editor


So much for optimism on the U.S. jobs front.

The U.S. Bureau of Labor Statistics said Friday that nonfarm payroll employment was up just 69,000 in May — glaringly short of predictions for around 150,000 jobs created — and April and March numbers were revised down by a respective 38,000 and 11,000 jobs.

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The unemployment rate? Essentially unchanged, at 8.2%, up a tick from April’s 8.1%.

The woeful numbers pretty much fell in line with Thursday’s labor news, which included disappointing private-business hiring numbers from ADP and rising unemployment claims for the seventh time in eight weeks.

Considering the barrage of negative jobs news coming out of Wall Street, we shouldn’t be surprised — and we might expect more of the same. A number of big-name companies announced scores of cuts or soon-to-come layoffs in the past month. Among those making bitter waves in May …

Hewlett-Packard: Rudderless tech giant Hewlett-Packard (NYSE:HPQ) made the biggest splash in May, announcing it would cut 27,000 jobs — or 8% of its 325,000 workers — by October 2014 in an effort to save about $3 billion to $3.5 billion annually, as well as to turn around a horrid stock performance that has persisted for years. The move will come with a one-time charge of $1.8 billion. HP’s CEO understated the moment, saying, “This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do.”

Research In Motion: Speaking of troubled tech stocks, Ontario-based BlackBerry maker Research In Motion (NASDAQ:RIMM) is rumored to be laying off at least 2,000 more people, according to reports in both The Globe and Mail and AllThingsD. One source also told Reuters the layoffs could affect up to 6,000 people across numerous divisions.

Bank of America: Financial titan Bank of America (NYSE:BAC) has had a fantastic 2012, with its shares up more than 30% year-to-date, but the stock’s performance isn’t enough to stay the axe. BofA will lay off “highly compensated investment bankers and non-U.S. wealth managers” by a tune of about 2,000 as part of an ongoing effort to trim its payrolls by 30,000 workers.

Procter & Gamble: Consumer goods giant Procter & Gamble (NYSE:PG) is trying to speed up its job-cutting program, asking employees to participate in a voluntary buyout program. The current phase is expected to eliminate 1,600 jobs as part of an attempt to cut 5,700 positions across its global operations.

United Continental: United (NYSE:UAL) told employees on Wednesday that it would be cutting 1,300 Houston jobs and scaling back operations at Bush Intercontinental airport. This came just hours after an announcement that the city council OK’d Southwest’s (NYSE:LUV) expansion at the city’s William P. Hobby Airport.

Medtronic: Minnesota medical device maker Medtronic (NYSE:MDT) said this month it would cut about 1,000 jobs, including some in its Twin Cities-based heart-rhythm device unit. The company did also say it planned to create 1,500 jobs within the next year, but “many” would be overseas.

General Mills: Also hitting Minnesota, foods manufacturer General Mills (NYSE:GIS) said it would be eliminating about 850 jobs, with half of those coming in Minneapolis and St. Paul.

Others: T-Mobile USA said “organizational changes” would result in about 900 layoffs, with many more affected; digital communications company Windstream (NASDAQ:WIN) said it would eliminate 375 to 400 jobs (roughly 3% of its work force) as part of restructuring; office supply retailer Staples (NASDAQ:SPLS) said it cut 500 jobs across the globe, including 200 in North America; and French health care company Sanofi (NYSE:SFY) said more than 100 workers will lose their jobs this summer as it prepares to close a manufacturing plant in Kansas City, which will cost 337 jobs.

Also, the moratorium for planned layoffs by the United States Postal Service has expired, which means the beginning of 35,000 job cuts — and those follow 140,000 layoffs in the past five years.

Of course, things could be worse: Euro-area unemployment just hit a record 11%.

Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley.

Article printed from InvestorPlace Media, https://investorplace.com/2012/06/lousy-jobs-report-follows-tear-of-wall-street-layoff-news/.

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