A government grant of $9.4 billion hasn't helped General Motors, one of the nation's Big Three automakers, retain its workforce.
GM today announced it will cut 10,000 jobs in May and continue global layoffs through the year. Mid-level salaries will be decreased 3 to 7 percent and executives will take 10 percent pay cuts. With a severe drop in car sales and the need for restructuring, GM joins a list of companies letting go of employees to keep their businesses afloat.
GM has received $9.4 billion in federal assistance and expects to get $4 billion more this month. In the past few months, GM has been under scrutiny after appealing for and receiving a $13.4 billion bailout. The company, along with Ford, was forced to sell its jet fleet as CEO Rick Wagoner arrived in Washington in November on a private plane while pleading for taxpayer money. All three automaker CEOs flew in corporate jets to Capitol Hill.
Despite the claims of scaling back, the company also recently showed up at the Super Bowl as a corporate NFL sponsor, continuing to offer the newest Cadillac to the MVP and providing courtesy vehicles for VIPs.
GM has already cut back on benefits and payroll of salaried workers since November. The company is still in talks with the United Auto Workers union about worker buyouts in an attempt to decrease outstanding debt.
The news of job cuts comes the day after GM vice chairman Robert Lutz announced his retirement. Lutz will be replaced by Thomas Stephens, GM's executive vice president of global powertrain and quality division, at the end of the year.
With more than 30 years of experience, Lutz claims that GM will pull through the recession under the automaker's viability plan to be submitted to Congress Feb. 17. The proposal will undoubtedly downsize the automaker, despite the federal financial assistance.
While he was not present at the congressional bailout hearings, Lutz's uncanny response to the increasing criticism of GM CEO Rick Wagoner was clear in a New York Times interview: "This is the equivalent of the Incan or Mayan days when everybody would go to the top of the volcano and throw a virgin in."
Lutz is well-known in the media for his outspoken remarks and in the industry as a larger-than-life revolutionary executive. He has worked for all three of the nation's major automakers, starting at GM in 1963 and returning in 2001 under the hire of Wagoner.
"If this is just the beginning of a very catastrophic economic situation, then all bets are off for everybody, and that includes our most esteemed Japanese competitors," Lutz said in Monday's New York Times article about the recession and the automaker's survival.
"We are a country that hates its own industry," he said. "The auto industry may be partly at fault for its situation, but not entirely."
Wal-Mart and FedEx
Wal-Mart has also today announced it will cut 800 jobs amid the Dow's 400-point drop in response to the president's new bailout plan.
Most of the Wal-Mart and Sam's Club job loss will be out of the company's Arkansas headquarters. Despite the round of layoffs, Wal-Mart Inc. spokesman David Tovar says the company plans to add employees at retail stores across the country, according to the Associated Press.
The company has about 4,100 stores nationwide and plans to scale back the development of new stores in the next year. According to the company's fact sheet, as the world's largest retailer, it boasts about $374.5 billion in sales for the 2008 fiscal year. The retail giant also plans to reorganize health centers by combining pharmacies and optical health clinics. Wal-Mart shares fell $1.61, or 3.3 percent, to $47.67 in an overall lower market today, according to the Associated Press.
FedEx plans to let go 900 jobs across 130 facilities. The company layoffs come after a decline in customer demand since December. Other cost-cutting measures include halting contribution to employees' retirement plans for at least a year.
A cheap night at home in front of the television may have new appeal for cost-conscious consumers these days, but that hasn't made television manufacturers and their employees immune to the recession.
Panasonic Corp., the electronics giant known for flat-screen TVs as well as digital cameras, announced that it would slash 15,000 jobs and close 27 plants worldwide. In December, rival consumer electronics maker Sony announced 16,000 job cuts.
Panasonic, which saw its third-quarter sales drop by 20 percent, announced its first annual loss in six years.
"The current financial crisis originated in the United States has spread across the world and the company's outlook of the business environment has been extremely uncertain," the company said in its financial forecast.
The Osaka-based corporation is one of several Japanese companies cutting back on global production and staff. Japanese corporations are dealing with low sales and implications of a weak global economy set off by the U.S. financial crisis. The company's cost-cutting measures will affect Japan's workforce with plans to close plants by the end of March next year.
Macy's and Financial Giant Morgan Stanley
The crumbling economy has taken its toll on one of the largest department store chains. Macy's announced that it will cut 7,000 jobs, about 4 percent of its work force.
The company's cost-cutting measures include restructuring its retail divisions and reducing planned expenses. Macy's Inc. operates more than 840 department stores -- under Macy's and Bloomingdale's -- across the nation, with corporate offices located in New York and Cincinnati.
Additionally, financial giants Morgan Stanley and Goldman Sachs said they are considering a second round of layoffs. Morgan Stanley plans to slash around 1,800 positions, up to 5 percent of its 47,000 employees, in the coming weeks -- after cutting 7,000 employees last year -- according to The Associated Press.
AOL and Starbucks
AOL Inc. chief executive Randy Falco sent an internal memo to employees about plans to cut about 700 jobs, 10 percent of its work force. AOL, a division of Time Warner Inc., is an Internet services and media company. But with the recession, many online marketers are tightening advertising budgets. Other cost-cutting measures include freezing salary increases.
Starbucks has announced plans to slash as many as 6,000 jobs and close 300 stores this year. The Seattle-based coffee giant reported a 69 percent drop in profit for the fiscal first quarter. In the summer, the company announced it would close 600 stores, laying off 1,000 employees.
Discount Retailer Target
Target Corp., the popular discount retailer, has also announced major layoffs. Target plans to reduce staff at its Minnesota headquarters, including about 600 employees and 400 open positions, primarily in the Twin Cities area. Later in the year, the company plans to close its Little Rock, Ark., distribution center, which staffs 500 employees.
In a statement to Reuters, the company cited the economy as the main reason for cutting jobs.
Stores have struggled financially because of poor retail sales in December and throughout the holidays. Other moves by the company include suspending senior salary increases, operating expenses and holding off on new store openings.
Besides general merchandise, the discounter also sells food and operates a co-branded credit card partnership with Visa. According to the company's October 2008 corporate report, Target maintains about 1,685 stores across 48 states.
Several major U.S. and foreign companies have announced thousands of new layoffs in the last few weeks as they work to adjust to new economic realities.
Home Depot, Sprint and Caterpillar
Sprint Nextel, the nation's third largest wireless carrier, was one of at least four large U.S.-based companies announcing large-scale job cuts. Pfizer, which is buying rival pharmaceutical giant Wyeth for $68 billion, is planning to cut 8,000 jobs by the end of March, about 13 percent of its work force.
"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," Sprint Nextel CEO Dan Hesse said in a statement.
The closure of Home Depot's high-end EXPO stores, meanwhile, will affect 7,000 employees, or 2 percent of the company's work force. In addition, Home Depot said it would also institute a salary freeze for company officers.
Construction equipment manufacturer Caterpillar said it would cut 20,000 jobs -- nearly 20 percent of its work force -- after reporting that its profits had fallen 32 percent. The company said the job cuts were designed to help "deliver our 'trough' profit target" of $40 billion in sales and revenues.
President Obama said last week in his speech on fuel-efficiency standards that layoffs at Caterpillar, Home Depot, Sprint Nextel and elsewhere "are not just numbers on a page."
"As with the millions of jobs lost in 2008, these are working men and women whose families have been disrupted and whose dreams have been put on hold," he said. "We owe it to each of them and to every single American to act with a sense of urgency and common purpose."
Unemployment: The Worst Year Since '45
Obama said he looked forward to signing a stimulus plan "that will put millions of Americans to work."
Well-known companies headquartered in the Netherlands have also announced major layoffs: Financial services company ING said it would cut 7,000 jobs while Phillips Electronics plans to cut 6,000. Both companies employ people in the United States.
MicrosoftMicrosoft said earlier this month it would slash 5,000 jobs in the next 18 months. It seems that even the once-mighty tech sector isn't immune from the recession.
"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.
Employers shed 524,000 workers last month, according to the Department of Labor. 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 then, but it's still significant.
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 President 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 unclear. 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 a few weeks ago.
Biggest Layoffs of 2008
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 weekly paychecks are cutting back on their spending for fear of losing their jobs down their road. While they might be saving for a rainy day, their lack of spending is driving the country deeper into a recession and putting their own jobs in jeopardy.
Here's a snapshot of some of the other 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.
It would be an understatement to say that 2008 was a bad year for U.S. automakers who had to turn to the government to bail them out for the time being. First, record-high gas prices drove consumers away from large SUVs and trucks that had been the bread and butter of the automakers for years. Then, banks started to cut off credit to consumers, making car loans harder and harder to come by. As part of its efforts to try and remain profitable, GM in May announced the layoff of 19,000 hourly workers.
Retailers had a particularly hard Christmas as consumers cut back on their spending. But even before the holiday shopping spree, KB Toys, with 275 stores in malls and nearly another 200 temporary and outlet stores, filed for Chapter 11 bankruptcy protection. It was the second filing in four years for the company. As the toy store company goes out of business, 15,000 workers will lose their jobs.
Restaurants to American Airlines
Things weren't so great in the restaurant business this year, either. Americans struggling with rising mortgages and high gas prices cut back on the number of times they ate out. One of the casualties was Bennigan's, which, in July, filed for bankruptcy, closing all the company-owned restaurants. About 9,300 people lost their jobs.
Even rocket scientists aren't immune from the bad economy. Faced with budget cutbacks, NASA announced in June that 7,000 employees at the space agency would lose their jobs.
High oil prices also took their toll on the airline industry. Airlines were forced to slash routes and ground older, gas-guzzling planes. With fewer flights, they needed fewer employees. In July, American Airlines announced 7,000 layoffs as part of its cost-cutting measures.
Investment Firms to Starbucks
This was not the year to be in the upscale coffee market. Starbucks, facing competition from lower-cost companies, such as Dunkin' Donuts and McDonald's, announced in July it was closing 600 under-performing, company-owned stores and cutting U.S. expansion plans amid concerns about America's slowing economy. As part of those store closings, 12,000 jobs were lost.
Shock waves spread throughout the financial world when Lehman Brothers filed for bankruptcy Sept. 15, the largest bankruptcy in U.S. history. British bank Barclays purchased Lehman's North American investment-banking and trading divisions, saving some jobs. But an estimated 16,000 people still lost their jobs in Lehman's collapse.
Alcoa, the largest U.S. aluminum producer, announced it will fire 13,500 employees in response to shrinking demand for aluminum. Basically, in this global recession, there is less need for aluminum as fewer people buy cars, appliances and other products that use the lightweight metal.
Banks to Electronics Stores
The largest bank failure of the year came when too many bad loans finally caught up with Washington Mutual, the nation's largest thrift. JP Morgan Chase purchased the bank for $1.9 billion. In December, JP Morgan announced the elimination of 9,200 jobs related to the WaMu acquisition. Another 9,160 jobs were cut in May by JP Morgan in connection to its acquisition of failed investment bank Bear Stearns.
In the past few years, consumers have flocked to electronics stores to buy new high-definition televisions, DVD players, digital cameras and all sorts of other electronics. Those purchases waned as the recession grew deeper, pushing struggling Circuit City over the edge. In November, the company filed for Chapter 11 bankruptcy protection. The move came a week after the retailer announced it was closing about 155 Circuit City stores. As part of the store closings, 7,305 jobs were cut.
AT&T to Delivery Businesses
Things aren't too good, either, for the country's largest telecommunications company, AT&T. If businesses are shutting their doors, they don't need phones. In December, AT&T said it was eliminating 12,000 jobs because of tough market conditions.
With less business out there, there are fewer packages being shipped. In May, DHL's German parent company announced plans to cut costs in its U.S. express delivery business by hiring UPS to handle North American air cargo transportation. The change meant 6,800 jobs would be cut.
With reports by ABC News' Charles Herman.