Premier firms shed 70,000 jobs

Premier employers such as Caterpillar, Sprint, Home Depot and Pfizer announced more than 70,000 job cuts in just one day Monday - a sign that January could be the worst month for U.S. job losses in a generation.

The increasingly bleak job news is prompting economists to estimate that more than 600,000 people will be laid off this month - something that has not occurred since the deep recession of 1974. This follows nearly 2 million job losses in the past four months, which is a pace unprecedented in modern times.

Economists expressed particular alarm because jobs are being shed not just by weak companies but by many of the nation’s most successful corporations. Among the companies that announced layoffs in recent days were technology mainstays Microsoft and Intel.

The job cuts at firms such as Microsoft that once seemed like an “unstoppable force” are worrying, said Jeff Segal, an analyst at Breakingviews.com. They suggest that even the strongest firms see tougher times ahead.

Jim Owens, the chief executive of Caterpillar, the world’s largest construction equipment maker that was previously buoyed by a worldwide building boom, said the company expects 2009 to be the worst for business in 30 years. A deep recession is forcing the company to make “seismic adjustments,” including 20,000 job cuts announced Monday. He said he is pinning his hopes for recovery on public works programs in the United States and China.

President Obama summed up the angst for Americans as they see hard-won jobs disappear.

“These are not just numbers on a page,” he said. “As with the millions of jobs lost in 2008, these are working men and women whose families have been disrupted and whose dreams have been put on hold,” he said.

While Mr. Obama called on Congress to quickly pass stimulus legislation intended to save or create jobs, economists say it may not be so easy. Past recessions show that most of the jobs lost are not likely to come back for months or years, if at all.

“It’s a hangover that will likely last for some time,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. The magnitude of the problem is stunning, he said, with the number of people collecting unemployment benefits nationwide nearly doubling in one year to 4.6 million.

“The number of people out of work and relying on unemployment insurance now exceeds the combined population of Vermont, New Hampshire, Delaware, Rhode Island and South Dakota,” he said.

Harm Bandholz, economist at Unicredit Markets, said a surge in jobless claims to 589,000 reported by the Labor Department last week occurred the same week the department collected figures on job losses and suggests that the total of payrolled employees who lost their jobs was between 625,000 and 650,000 during the month.

Collective job cuts that big would exceed even the eye-popping 584,000 job losses seen in November, during the throes of the banking crisis, and would be the worst since at least December 1974, when 602,000 jobs were lost, according to the department.

“It gives us a first idea of how bad the labor market situation has been,” Mr. Bandholz said.

Some of the worst job losses have been in manufacturing and construction, which have taken the brunt of the deepest housing and auto industry collapses in modern times. But economists say other industries also are preparing to eliminate jobs.

Home Depot Inc. said Monday that it will cut 7,000 jobs, or 2 percent of its work force. The world’s largest home-improvement retailer, whose fortunes have fallen with the housing market, also said it will exit its Expo home-decor business.

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