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Retail you can understand, as the holiday shopping season comes to an end and the sales hangover sets in. Telecom didn't need many companies to boost the layoff announcements. Verizon (VZ) said that it would fire (because that's what it really comes down to) an additional 13,000 employees, even as the company had strong wireless growth and yet had a net loss for last quarter, largely because of the $3 billion it was taking from the 8,000 employees it had already sent packing. The problem is the landline business, which is not only waning, but which Verizon has seemed anxious to leave. In each of the last two years it dropped 13,000 employees from the landline business. Notice a pattern here?
It's tempting to say, "Oh, but that's a one-time thing." Unfortunately, it's almost always supposed to be a one time thing. But when you have large companies taking turns cutting jobs to preserve earnings, there's always another one-time thing to batter the industry a bit more. The level of industry layoffs is certainly down from this time last year, but I wouldn't make bets on this being the end. We have a number of factors:
- Hardware keeps getting cheaper, cutting out margin.
- Other industries are still hurting and IT budgets are under tight reins.
- Consumer spending is also tight.
- Increasingly, there are ways for people and businesses to find free or low-cost alternatives to services that once brought in revenue to companies.
Executioner image via stock.xchng user sateda, standard site license.