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Layoff Announcements Fall Sharply

The flood of layoff announcements from corporations receded in August, falling 32 percent from July's record pace.

Companies announced 140,019 job reductions in August, continuing a trend that began in December, according to the monthly report by Challenger, Gray & Christmas, an international outplacement firm. In July, U.S. companies announced 205,975 job cuts.

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So far in 2001, 1.12 million layoff announcements have been made, by far the greatest annual total in the eight-year history of the Challenger survey.

Challenger painted a gloomy picture of the job market.

"There is no evidence reported by any industry that anything that could be called a significant sustainable rebound is on the horizon for this year or even into early next year," said John Challenger, CEO of the firm.

"Recovery may be a longer way off than Wall Street analysts expect," he said.

Layoff announcements do not necessarily lead to immediate job losses. Companies often announce a goal of job reductions for the next few months or even years. Many of the reductions are accomplished by normal attrition through voluntary retirements or resignations.

Companies also may be hiring at some divisions while shedding jobs at others.

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The Labor Department will report its August jobs report on Friday, based on data from 350,000 work sites across the nation. Economists expect a loss of 41,000 jobs in August after a loss of 42,000 in July. See Economic Calendar.

Once again in August, telecommunications companies was the sector with the announcements, shedding 38,087 jobs. The sector has announced 213,437 job cuts so far in 2001.

Electronics companies laid off 20,788 in August, bringing the yearly total to 102,769.

Financial companies announced 12,625 cuts in August.

Among the major companies announcing job cuts in August were: Citigroup 3,500; ADC 2,500; Charles Schwab 2,400; AOL Time Warner 1,700; Tellabs 1,000; and Corning 1,000.

Japanese companies made the biggest splash in August. Toshiba cut 18,800, Fujitsu cut 16,400, Hitachi cut 14,700, and Kyocera slashed 10,000.

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