After all, a host of huge layoffs during the depths of the downturn theoretically “right sized” many of the biggest companies.
Hewlett-Packard (NYSE:HPQ) laid off almost 25,000 in September 2008, in part because of a big acquisition and redundancies, but also because of the slowdown. Bank of America (NYSE:BAC) announced it would cut 30,000 in September 2011 in the wake of the financial crisis. Heck, even the Post Office got in on the action and announced it might cut as many as 30,000 workers in 2011.
But that hasn’t stopped the bleeding at many companies, and layoffs are again the order of the day.
The dumpster fire that is Bank of America has stepped up its layoff plans. BofA apparently will cut 16,000 jobs by year’s end, according to a Wall Street Journal report; the motivation is part of a move to prop up profits amid declining revenue.
Here are the details:
“The reductions for the final six months of the year, outlined in a document given to top management, are part of a larger effort to retool Bank of America into a leaner and more focused enterprise. The plan is designed to make the company take less risk, generate more revenue out of existing customers and use an investment banking operation inherited from Merrill Lynch & Co. to become a major deal maker around the world.”
Apparently nobody told BofA that you can’t cut your way to growth … the headcount of 260,000 would be the lowest since 2008, when the financial crisis gutted the financial stock.
In other financial job cuts, investment banking giant Nomura is planning to slash operations around the globe. There are reports that Nomura is gutting its European investment banking division, with up to 30% of jobs at risk. This from CNBC:
“Operations in Europe, the Middle East, and Africa will account for 45 percent of cost savings, the bank said, while units in the Americas will see costs cut of 21 percent, Asia-outside Japan will see cuts of 18 percent and Japanese operations will see cuts of 16 percent.”
So while many of those jobs cuts will come from overseas, those on Wall Street and elsewhere in the U.S. are not immune.
Also in the news: Bankrupt American Airlines parent AMR Corp (PINK:AAMRQ) notified more than 11,000 workers on Tuesday that they could lose their jobs. That headline number isn’t expected to the final pink slip count, of course. As part of its reorganization, the airline is cutting flights and cutting costs. Reuters reports this:
“The U.S. carrier expects fewer than 40 percent of those it sent notices to, or 4,400 people, will actually be laid off in November and December, spokesman Bruce Hicks said.”
Still, 4,400 jobs is no small cut.
There are sundry other smaller cuts going on, too. And while many of these cuts eliminate unfilled positions or buy out employees with early retirement, the bottom line is that these are jobs that are disappearing to never be filled or provide paychecks again.
- The wind energy division of German blue chip Siemens (NYSE:SI) will lay off 615 in Kansas. Execs blame a lack of demand thanks to the death of a tax credit that boosted the alternative-energy business.
- Defense and aerospace stock Northrop Grumman (NYSE:NOC) is cutting 600 positions because of Pentagon budget cuts, though most were absorbed via buyouts.
- Boston Children’s Hospital just cut 255 jobs, mostly through attrition, but resulting in 45 layoffs.
- Ohio utility FirstEnergy (NYSE:FE) laid off 200 in the Akron region — and worst of all, anticipates even more reductions in 2013.
- Texas-based Scooter Store, famous for its infomercial pitches to seniors, is laying off 220, or almost 10% of its work force, after a management shakeup in May.
Unemployment remains over 8%, and it doesn’t appear to be going anywhere. That’s partially because of a lack of new jobs … but also because old jobs continue to disappear despite almost four years between now and the Great Recession.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via@JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.