More Grim News: Microsoft Fires 5,000

Starbucks. Circuit City. American Airlines. The list goes on and on.

Every day it seems another massive layoff is announced at some of the country's best-known companies. Those job losses, in addition to thousands of mom-and-pop businesses, made 2008 one of the worst years for employment in our country's history.

Microsoft Slashes 5,000 Jobs

The latest bad news came today from Microsoft: it will slash 5,000 jobs over the next 18 months. It seems that even the once-mighty tech sector isn't immune from this recession.

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"While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach," Microsoft CEO Steve Ballmer said in a statement today.

According to the Department of Labor, in December alone, employers shed 524,000 workers. Unemployment now stands at 7.2 percent, the highest since January 1993.

The losses make 2008 the worst year for layoffs since 1945 when 2.75 million jobs were lost. Granted, the U.S. workforce was smaller back then, but it's still a shocking number.

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The December losses also show an accelerating number of layoffs in recent months, leaving the prospect for workers in 2009 that much more grim.

And many investors on Wall Street look toward Obama to see how exactly his proposed stimulus plan "will save or create at least 3 million jobs over the next few years," as he says.

How he will do that is not yet clear. Obama said he plans to invest in energy, education, health care and new infrastructure.

"We will put Americans to work in new jobs that pay well and can't be outsourced -- jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain," Obama said Wednesday.

But, in the meantime, a growing number of Americans are collecting unemployment and desperately searching for new jobs, ones that pay close to what they used to make.

Beyond that, fear of layoffs is taking its own toll on the economy. Some workers who still draw a weekly paycheck are cutting back on their spending for fear of losing their job down their road. While they might be saving for that rainy day, their lack of spending is driving the country deeper into a recession and putting their own jobs in jeopardy.

Biggest Layoffs of 2008

Here's a snapshot of some of the biggest layoff announcements of the past 12 months, provided to ABC News by outplacement firm Challenger, Gray & Christmas. While some of these have already been reflected in the government data, others will be phased in during the next few months.

The financial sector has been hit particularly hard in this recession as bad investments and risky loans have gone bad. Banking giant Citigroup had more layoffs than any other company in 2008, according to Challenger, Gray & Christmas, first with a 9,000-job cut announced in April and then another 50,000 jobs eliminated right before Thanksgiving.

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