Do you remember what it was like in 2008 when it literally felt like no job was truly safe? It was a terrible time, and many fear that we could soon be facing a similar scenario. In recent days, big companies all across America have been laying off workers at a frightening pace. As economic activity has slowed down, a lot of firms are feeling compelled to slash their payrolls, and if a deep recession is ahead of us then what we have seen so far could be just the tip of the iceberg. In 2008 and 2009, millions of Americans lost their jobs very rapidly, and it could very easily happen again.
As I have been conducting research over the past few days, I have been struck by the stunning number of layoff announcements that are suddenly popping up in the news. Here are 12 of the most prominent examples…
#1 HP Inc: “U.S. personal computer maker HP Inc said on Thursday it will cut up to 16% of its workforce as part of a restructuring plan aimed at cutting costs. The company will cut about 7,000 to 9,000 jobs through a combination of employee exits and voluntary early retirement, it said in a statement.”
#2 WeWork: “WeWork, the co-working business once valued at $47 billion, is expected to announce significant layoffs this month, Bloomberg reports. This follows reports the company was looking to slash as many as 5,000 roles, or one-third of its workforce.”
#3 Kroger: “Kroger is laying off hundreds of employees across the family of grocery stores it owns, a person familiar with the situation tells CNBC.”
#4 Sports Illustrated: “The revered 65-year-old Sports Illustrated magazine is in a state of bedlam. In meetings Thursday afternoon, managers told staff members that about half the newsroom would be laid off, according to two people present at the meetings.”
#5 Uber: “The 435 employees cut from Uber include members from its product team and engineering team.”
#7 Bayou Steel Group: “According to Market Realist, Bayou Steel Group filed for bankruptcy on Tuesday and the company laid off 376 workers. U.S. Steel and ArcelorMittal also curtailed some of their facilities. U.S. Steel idled two of its US blast furnaces earlier this year and the company expects those blast furnaces to be idle until at least the end of the year.”
#8 Elanco: “Elanco Animal Health Inc. which went public a year ago, on Monday said it plans to lay off 250 workers to save $12 million in 2020.”
#9 Lazard Asset Management: “Lazard Ltd. is cutting up to 7% of its employees in its asset-management division and closing some investment funds by year’s end, people familiar with the matter said, amid a tougher climate for money managers.”
#10 Advance Engineering Corporation: “Advance Engineering Corporation, Elgin, permanent closing due to relocation affecting 114 employees. First layoff date is Nov. 4, with layoffs to be completed by Dec. 31.”
#11 Daimler Trucks North America: “The company is laying off 450 workers at its Mount Holly plant and about the same number at its plant in Cleveland.”
#12 Genesis Healthcare: “Genesis Healthcare, in a statement to McKnight’s on Wednesday said it has reorganized its therapy gyms in response to PDPM and other industry changes. The company laid off 585 out of about 10,000 Genesis Rehab employees.”
This isn’t what a “booming economy” looks like.
In fact, this is precisely what we would expect to see as the U.S. economy plunges into a major economic downturn.
Of course, a lot of people out there don’t want to believe that this is actually happening. There are many that have absolutely convinced themselves that the good times will keep rolling indefinitely, even though all of the evidence is pointing to the contrary.
On Wall Street, investors are trying to make sense of all the negative data that we have been receiving lately, and many of them are starting to become quite nervous…
Lagging or leading, macro or micro, global or domestic. For investors, all that matters to keep the bull market intact is whether this week’s torrent of data is flashing a recession ahead or just a few local shocks.
In a market so divided on the outlook, every piece of data holds the prospect of vindication or rebuttal — and numbers on Thursday just handed fresh ammo to the bears. A U.S. services gauge dropped to a three-year low in September and jobless claims rose more than expected, shortly after a euro-zone report showing a factory slump has spread to services.
Needless to say, all of the chaos in Washington is certainly not going to help matters. The federal government will be paralyzed while this impeachment inquiry plays out, and Democrats are hoping to have articles of impeachment ready for a vote around Thanksgiving.
And I know that a lot of people don’t want to hear this, but Nancy Pelosi believes that she already has the votes that she needs.
That means that President Trump could be headed for impeachment, and a Senate trial would unleash chaos all over America. We are already a deeply, deeply divided nation, and their entire saga is going to make things much worse.
You see, the truth is that our economic problems are not just happening in a vacuum. There are many different elements to the emerging “perfect storm”, and they are all going to feed into one another.
So buckle your seat belts and get prepared for rougher times, because this drama is only in the very early chapters.
Article posted with permission from Michael Snyder
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