"The recent news does not bode well," said Rich Yamarone, director of economic research at Argus Research. "This is the reason it's going to be the longest recession we've had in post World War II history."
The week got off to a rough start on Monday when Dow Chemical (DOW, Fortune 500) said it would eliminate 5,000 positions and close 20 plants. In addition, Belgian-based brewer Anheuser-Busch InBev said it would reduce 1,400 positions; 3M (MMM, Fortune 500) also reported 1,800 cuts.
On Tuesday Sony (SNE), Danaher Corp. (DHR, Fortune 500), Wyndham Worldwide (WYN), the National Football League and Principal Financial Group (PFG, Fortune 500) announced job cuts totaling another 14,400 positions. Novellus Systems (NVLS) and electronics gaming company EA (ERTS) also announced staff reductions without specifying a number of employees.
On Wednesday, Office Depot (ODP, Fortune 500) unveiled its plan to cut about 2,200 jobs; British mining company Rio Tinto said it would cut 14,000 jobs worldwide; and SKF, a Swedish manufacturer of bearings, revealed plans to lay off 2,500 workers globally.
Thursday was particularly bad, thanks to news that Bank of America (BAC, Fortune 500) plans to slash up to 35,000 jobs over the next three years as it absorbs Merrill Lynch and contends with the deepening recession.
On Friday came the announcement that specialty chemicals maker Chemtura (CEM) will cut about 500 people, or 20% of its staff, because of declining sales. Fairchild Semiconductor (FCS) said it plans to cut about 1,100 jobs worldwide, or about 12% of its work force, to reduce payroll expenses.
All in all, 19 big-name companies announced 81,500 job cuts, according to company reports. That figure is likely larger, however, because it does not reflect layoffs happening at small- and mid-sized businesses.
This follows a slew of bad news the previous week, when AT&T (T, Fortune 500), Credit Suisse Group (CS), DuPont (DD, Fortune 500) and Viacom Inc. (VIA), among others, announced about 34,000 cuts.
Midway through the month, December's job cut total stands at 115,416.
In terms of job losses, December could be even worse than November, when 533,000 jobs were lost, according to the Labor Department. That was the largest monthly loss since December 1974.
"Generally companies like to make their cuts by the end of the year," explained David Wyss, chief economist at Standard & Poor's. As such, he expects there to be many more cuts announced over the rest of the month.
2009 and beyondGoing forward, "the job market will continue to deteriorate for the next couple of months," said Bernard Baumohl, chief economist at the Economic Outlook Group.
Baumohl expects monthly job loses of 550,000 to 600,000, but "it may very well exceed 600,000 too because of the severity and speed this economy is sinking into a recession," he said.
In terms of job losses, 2008 is on pace to be the worst since 1982, according to Bureau of Labor Statistics data. But if Baumohl's 600,000+ prediction is accurate, 2008 could show the greatest number of layoffs since 1945, when the economy shed 2.75 million jobs.
"These job-loss announcements are going to impact the job reports in January, February, March and April," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute, because that's when many of the announced layoffs will actually occur.
Economists say the unemployment rate, which stands at 6.7%, will also rise over the course of next year and into 2010.
Wyss predicts it will be 8.5% by December of next year. Baumohl said the jobless rate will peak close to 10% by the end of next year or early 2010.
"A lot depends on what happens with the auto bailout," Baumohl added. "If that does not come through, then obviously the situation becomes even more dire in terms of layoffs and claims for unemployment insurance."
The Senate failed to pass a $14 billion bailout plan on Thursday, but the White House said it may tap the $700 billion bailout approved by Congress in October to help the auto industry.
Whirlpool will cut jobs, close Jackson plant
More job cuts loom as economy slows
