Fourth quarters are always a tough time when it comes to layoffs. That's because companies often do last-minute cost cutting at year-end to hit their budget targets and make their numbers look good.
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This year appears to be no different, as corporate America announced 99,279 layoffs last month. That's up 22 percent from the 81,301 job cuts announced in October, according to the outplacement firm Challenger, Gray & Christmas.
CEO John Challenger noted that the November tally marks the highest number of job cuts announced since July and represents the third straight month of increased layoffs in what he noted was becoming an "annual ritual" of year-end cost cutting.
A major driver of the job cuts last month was again the troubled auto industry. The auto industry was the biggest contributor to November's layoff announcements, slashing an additional 16,870 jobs. They are also the layoff leaders so far this year, having announced 105,886 cuts since January, which represents around 11 percent of all job cuts announced in 2005, according to Challenger.
"Downsizing in the auto industry is expected to continue well into the new year, as companies try to bring production capacity in line with the reality of the market," Challenger said. "This, of course, will affect everyone down the line in the supply chain. In fact, nearly half of the auto industry job cuts in November occurred at the supplier level." Unfortunately, a "turnaround and return to job growth for the industry does not appear to be a possibility in the foreseeable future," he added.
He's right. In fact, the November job cut figures released this morning don't even reflect more bad news that came out of Detroit today.
According to published news reports, Ford Motor Co. is considering a plan to trim 25,000 to 30,000 jobs over the next five years—not 20,000 as was earlier reported—as part of a plan to close at least 10 plants in North America.
While Ford's board has yet to make a final decision, the plan under consideration would certainly be in line with the 30,000 job cuts that rival General Motors announced earlier this year.
Biz Buzz wraps up the day's market news and offers an agenda of upcoming economic news.
