Job Cuts Bruise All Economic Sectors

Major layoffs and other measures aimed at lowering payroll have become standard practice at some of America’s largest firms. The trend is as typical in Detroit as in New York City, leaving hundreds of thousands marginalized and unemployed as the economy continues to sputter. Lehman Brothers Holdings Inc. announced yesterday that it was preparing to layoff another 1,500 employees. This fourth such layoff of the past 12 months would bring the total since last June to over 6,000 according to The New York Times.

General Motors Corp. has also announced that it will offer early-retirement incentives to 9,000 U.S. salaried-workers in an effort to cut 20 percent of its worker costs by November, according to Bloomberg.

GM has already convinced 53,000 union workers to accept buyouts and early-retirement options and made plans to shut down many U.S. manufacturing plants. All of these moves are part of a plan which would hopefully save the company $10 billion over the next few years.

The plight of the American auto and financial industries has been well-documented, but the sheer magnitude is difficult to fathom. Securities firms, investment and savings banks, and other financial institutions have terminated over 100,000 jobs in the last year. The American auto industry, which has already been greatly undermined by NAFTA outsourcing, has continued to reel in the wake of high fuel prices, shifting consumer demand and poor management overall.

America can ill-afford to lose well-paying and productive jobs at its current rate. If GM’s 9,000 eligible employees accept their incentive packages, it will have cut the U.S. workforce of 32,000 by nearly one third. Likewise, Lehman Brothers newest set of layoffs represents a full 6 percent of its employees. Any economy will have unemployment, as some individuals simply prefer not to work, but the somewhat staggering rate of current layoffs has flooded the work-pool with productive and driven individuals. America cannot recover from this recession without gainfully-employed people, and their numbers seem to be shrinking with regularity.

Source The New York Times:

Source Bloomberg:

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