Jan sees 9,000 job losses daily; 6 US bank failures

More people are becoming unemployed in 2009,with nearly 9,000 jobs vanishing worldwide on an average each day in January.

Written by Agencies | New York | Published: February 1, 2009 1:00:37 pm

More and more people are becoming unemployed in 2009,with nearly 9,000 jobs vanishing worldwide on an average each day in January.

As the financial turmoil continues to rattle world economies,layoffs so far this year have crossed the 2,77,000 -mark with a stunning 80,000 job cuts announced January 26.

Right from electronics to telecom to pharma sectors,about 9,000 jobs were lost on an average every day this month.

Among the entities,construction machinery manufacturer Caterpillar,Japanese electronics major NEC and pharma giant Pfizer have announced over 20,000 job cuts each. Dutch entities – electronics firm Philips and financial services company ING – together would be axing 13,000 jobs in the coming months.

Caterpillar,Pfizer,telecom firm Sprint Nextel Corp and home improvement retailer Home Depot together accounted for 61,000 lay-off announcements on January 26. The total job cuts announced on that day worldwide had crossed 80,000.

The bankruptcy of American electronics retailer Circuit City is expected to affect 30,000 employees whereas aluminium manufacturer Alcoa would be laying off 13,500 people.

Further,Indian conglomerate Tatas-owned UK steel maker Corus would be reducing its workforce by 3,500.

Other entities which unveiled plans to bring down headcount in January include TDK (8,000),BHP Billiton (6,000),Ericsson (5,000),Corning (4,900),Motorola (4,000),Texas Instruments (3,400),Honda (3,100),Kodak (3,000),Ford Motor (1,200) and Harley-Davidson (1,100).

Companies worldwide are bringing down their workforce as they explore ways to battle the dire economic situation. With consumer and business spending being crimped,many of the developed nations have already entered into recession.

Hit by the adverse economic situation,NEC on Friday said it would reducing the strength by over 20,000 employees,including the outsourced workforce.

The reductions would be at “poorly performing group companies”,the firm noted in a statement,adding it would also be bringing down outsourcing through “increased in-house development”.

As on 2008,the company had a total employee strength of about 1,50,000.

Another Japanese electronics giant Hitachi would be slashing up to 7,000 jobs.

In a reflection of how deep the economic turbulence is hurting the American corporates,software giant Microsoft has said it would eliminate nearly 5,000 jobs across various departments.

“Microsoft will eliminate up to 5,000 jobs in R&D,HR,marketing,sales,finance,legal,and IT over the next 18 months,including 1,400 jobs today,” the company said in a statement.

Presenting a gloomy outlook,the International Labour Organisation has projected that job losses worldwide could be over 50 million in 2009,if the global economic situation continues to deteriorate.

Jan sees six US bank failures,highest for a month in 8 yrs

The number of banks collapsing in the US with each passing day simply denies to decline,with six entities shutting down in January itself,the highest for any month in the last eight years.

In yet another reflection of how deep the recession is rattling the country’s banking sector,three banks were closed down by the authorities on Friday last alone.

Salt Lake City-based MagnetBank,Suburban Federal Savings Bank in Crofton and Ocala National Bank in Ocala are the latest ones,taking the total to six banks so far in 2009,shows the latest data available with the Federal Deposit Insurance Corporation (FDIC).

Another three entities — National Bank of Commerce,Bank of Clark County and 1st Centennial Bank — had also collapsed in January.

Going by figures from the FDIC,an independent agency which is often appointed as receiver of failed banks,the six failures is the highest for any month since 2000.

Earlier,the maximum collapses was in November 2008,when five banks went belly up as the financial crisis turned intense after Lehman Brothers fell in September 2008.

Since September 2008,the world’s largest economy has seen the failure of 21 banks,even with billions of dollars of taxpayers’ money being pumped into the financial system.

In 2008 alone,25 banks were shut by the authorities — an average of two entities going under each month — making it the highest since 2000. Prior to that,largest number of bank failures took place in 2002,when 11 entities went belly up.

Among the recent collapses,the most prominent was the failure of Washington Mutual,then the country’s largest savings and loan entity. Better known as WaMu,the entity was closed on September 25 and it was later snapped up by JPMorgan for nearly two billion dollars.

The ones that failed have been mostly small and regional banks.

On the other hand,official statistics show that the number of banks in America has been steadily declining since 1990.

As per the FDIC data,the number of commercial banks in America has come down by over 5,000 in the past 18 years.

Recent collapses include First Georgia Community Bank,Sanderson State Bank,Haven Trust Bank,PFF Bank and Trust,Downey Savings and Loan,The Community Bank,Meridian Bank,Franklin Bank SSB and Security Pacific Bank.

Even the financial majors like Citigroup and Bank of America are reeling under the economic turmoil. The Federal government last month had thrown lifelines to the two entities by injecting 40 billion dollars as fresh capital into them,apart from guaranteeing assets worth billions of dollars.

President Barack Obama is expected to unveil a mammoth 819-billion dollar stimulus package to bolster the nation’s recession-hit economy. The plan has already received the green signal from the House of Representatives and would voted on by the Senate this week.

Meanwhile,the advanced estimates from the Bureau of Economic Analysis has said that the American economy contracted 3.8 per cent in the fourth quarter of 2008.

The GDP had shrunk 0.5 per cent in the third quarter of 2008.

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