Jobless America: Employers Cut 651,000 Jobs; Unemployment Rate At 8.1 Percent
Employers cut 651,000 in February across nearly all sectors.
March 6, 2009— -- The country lost another 650,000 jobs last month while the unemployment rate jumped to 8.1 percent as companies continued to slash payrolls in the face of an unyielding recession.
In the last four months alone, employers shed 2.6 million jobs. Last month, according to the U.S. Bureau of Labor Statistics, job declines were "widespread across nearly all major industry sectors."
The government also reported that December and January sustained greater job losses than previously calculated. Employers shed 681,000 jobs in December and 655,000 jobs in January. The new December total rivals losses not seen in some 60 years.
Only a handful of sectors have added jobs: education, health care and government.
In New York City, where 6.6 percent of the workforce is unemployed, nearly 4,000 people lined up for a job fair this week.
"I work on it every day," job seeker Juliet Giamartino said. "My husband works on it every day. You got to put in to get out."
Economists have predicted that the country, stuck in a recession since December 2007, will continue to bleed jobs well into the second half of next year.
In February, companies large and small and across all sectors of the economy announced they were shedding jobs in hopes of remaining profitable. Chrysler, for instance, was just one of the big American companies last month to fire workers in hopes of staying afloat in this recession.
The country's No. 3 automaker announced recently that as part of its financial viability plan it would cut another 3,000 jobs. Since January 2007, the company has cut 32,000 positions, or 37 percent of its work force. These latest cuts will bring that number to 35,000.
Chrysler's cuts came despite the $4 billion in loans the company has received from the federal government. Like Chrysler, top U.S. automaker General Motors and French car company Peugeot have also received billions in government aid but still recently slashed thousands of jobs.
Peugeot plans to cut its work force by up to 12,000 jobs, despite a recent $4 billion bailout by the French government, while GM also announced last month that it would cut 10,000 jobs by May and continue global layoffs through the year. Mid-level salaries, the company said, would also be reduced by 3 to 7 percent, and executives would take 10 percent pay 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.
In December, consumer electronics titan Sony kicked off the recent spate of electronics manufacturer layoffs with 16,000 job cuts, including 8,000 part-time and seasonal workers.
The electronics slump has extended to at least one electronics retailer: In November, Circuit City 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.
"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.
In late January, 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, and freeze salary increases. AOL, a division of Time Warner Inc., is an Internet services and media company. Falco explained that the company's been hurt as online marketers tighten advertising budgets.
People talking on cell phones remains a ubiquitous sight around the world, but that doesn't mean that telecommunications companies are sailing through the global economic slump.
The country's largest telecommunications company, AT&T, said in December that it was eliminating 12,000 jobs because of tough market conditions. Sprint Nextel, the nation's third-largest wireless carrier, announced 4,000 job cuts in January.
"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.
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.
Of the country's five former brokerage giants, only Morgan Stanley and Goldman Sachs have survived the recession. But both did so by converting themselves into bank holding companies -- a move that qualified them for the federal government's bank bailout -- and laying off thousands of employees.
Morgan, which cut 7,000 jobs last year, may now cut 1,800 more, the Wall Street Journal reports. Goldman, which announced 3,200 in job cuts in November, is also reportedly considering more reductions.
The retail banking sector has seen its own share of job losses, including those caused by the largest bank failure of the year. When too many bad loans finally caught up with Washington Mutual, the nation's largest thrift, JPMorgan Chase, purchased the bank for $1.9 billion.
In December, JPMorgan 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 with its acquisition of failed investment bank Bear Stearns.
Banking giant Citigroup had more layoffs than any other company in 2008, according to the outplacement firm Challenger, Gray & Christmas. Citigroup announced a 9,000-job reduction in April, but the brunt of its layoffs came right before Thanksgiving: another 50,000 jobs eliminated.
In a statement to Reuters, the company cited the economy as the main reason for cutting jobs.
The crumbling economy has also taken its toll on one of the largest department store chains. Macy's announced Feb. 2 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.
While belt-tightening consumers may embark on more do-it-yourself projects instead of hiring contractors, that hasn't stopped do-it-yourself mecca Home Depot from scaling back its operations. The home improvement retailer is closing its high-end EXPO stores, a move that 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.
The grim shopping environment may have been the fatal blow to KB Toys. The toy retailer, with 275 stores in malls and nearly 200 more temporary and outlet stores, filed for 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.
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.
With reports by ABC News' Sarah Netter, Scott Mayerowitz and Eleanor Hong.