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News > Economy
Job cuts soared in March
April 5, 2001: 2:19 p.m. ET

Announced cuts rose to nearly 163,000 from about 56,000 a year ago
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NEW YORK (CNNfn) - U.S. companies announced more than 150,000 job cuts in March, capping a dismal four-month period in which more than half a million job cuts were announced, a leading outplacement firm said Thursday.

graphicChallenger Gray & Christmas Inc. said 162,867 cuts were announced in March, compared with 101,731 cuts in February and only 55,783 cuts in March 2000.

It was the fourth straight month with more than 100,000 cuts. Since December 2000, 540,519 cuts have been announced, more than were announced in many years.

It also was the worst month for job cuts Challenger Gray & Christmas has seen since 1993, when it began tracking monthly data.

'Dramatic demonstration of the New Economy'

Still, John Challenger, chief executive officer of the Chicago-based firm, said the so-called "New Economy," with its rapid growth and technological advancement, has helped the U.S. work force bounce back from such drastic cuts.

"With job-cut figures surging, you would expect to see long lines at the unemployment offices and at every location looking to hire," Challenger said in a statement.

"The fact that this is not occurring is probably the most dramatic demonstration of the New Economy since the language came into vogue," he said.

New and Old Economies feel pinch

Hardest hit by job-cut announcements were the electronics, telecommunications and computer sectors, Challenger said. But "Old Economy" industries also were hit hard, including the automotive, consumer products, financial and retail sectors.

California, Michigan, Connecticut, Ohio and Illinois led U.S. states with the most job cuts.

Some of the biggest job-cut announcements in March came from auto-parts maker Delphi Automotive Systems Corp. (DPH: up $0.01 to $13.40, Research, Estimates), which cut 11,500 jobs; consumer-products maker Procter & Gamble (PG: up $0.08 to $60.95, Research, Estimates), which cut 9,600 jobs; and mobile-phone maker Motorola (MOT: up $0.72 to $14.77, Research, Estimates), which cut 11,000 jobs to bring its total for the year to 22,000.

The rash of cuts continued into April, with French telecommunications equipment maker Alcatel (ALA: Research, Estimates) cutting 1,100 U.S. jobs; supermarket chain Supervalu Inc. (SVU: Research, Estimates) slashing 4,500 jobs; telecommunications company WinStar Communications Inc. (WCII: Research, Estimates) cutting 2,000 jobs, or about 43 percent of its work force; and auto-parts maker Visteon Corp. (VC: Research, Estimates) cutting 1,800 jobs.

Wall St. awaiting U.S. jobs report

The report comes ahead of Friday's government jobs report for March, which is expected to show a rise in the unemployment rate to 4.3 percent from 4.2 percent in February, according to economists polled by Reuters.

Wall Street analysts and Federal Reserve policy-makers have noted there is often a disparity between announcements of job losses and actual cuts in payrolls. Companies may announce significantly more jobs cuts than they actually put into practice, and there is usually a lag time after announcements are made.

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Federal Reserve Bank of Dallas President Robert McTeer said Wednesday the U.S. unemployment rate would soon rise if the recent spate of layoff announcements continued at the current pace. But he acknowledged there was a disparity between the number of layoffs being announced and actual job losses.

Separately, the government reported Thursday that new jobless claims rose to the highest level in more than 2-1/2 years last week, rising by 18,000 to 383,000. graphic


- from staff and wire reports





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