The economy may be showing many signs of improvement. The Federal Reserve Board, in the belief that expansion will continue, has signaled more interest-rate hikes in the near future.
But for tens of thousands of workers, the past week was a reminder that economic growth and earnings growth don’t necessarily translate into job growth. In fact, they can be accompanied by massive job cutbacks.
At least three companies announced plans to lighten their payrolls by more than 30,000 jobs this past week alone; another is reportedly mulling whether to cut an additional 10,000 or so positions.
Hewlett-Packard Co. led off the week by announcing that about 14,500 positions would be eliminated as part of its sweeping reorganization.
Serial downsizer Eastman Kodak announced that it will lay off between 22,500 and 25,000 workers, an increase from the 15,000 positions announced in January 2004 during an earlier restructuring program. Kodak’s more aggressive reductions are related to the company’s continued movement toward digital products, “as sales of our traditional consumer products and services decline faster than anticipated,” according to a statement by chief executive officer and president Antonio M. Perez.
On Friday, Kimberly-Clark Corp. announced a reorganization that calls for the reduction of about 6,000 employees, or 10 percent of its total workforce, by the end of 2008. The company added that it will sell or close 20 manufacturing facilities, or 17 percent of the company’s worldwide total, and streamline four others.
Meanwhile, The Wall Street Journal, citing “some employees,” reported that Ford Motor Co. is considering the elimination of about 10,500 white-collar workers, or 30 percent of its total salaried workforce. Ford spokesman Oscar Suris told the Journal, “We realize we have operating challenges [including] excess manufacturing capacity issues and cost performance issues, and we are going to address them.”