While the jobs market looks brighter, companies are still handing out pink slips and massive layoffs are in store for government workers.
NEW YORK (TheStreet) -- While economists agree that layoffs will be less severe in 2012, companies continue to dole out pink slips. Recovery in the jobs market is expected to be nothing short of slow and painful going forward.
The government and financial sectors, in particular, will struggle this year, according to consultants Challenger, Gray & Christmas. "Washington is under immense pressure to cut spending and it looks like every deal to extend tax cuts, raise the debt ceiling and pass the budget will come with measures to cut spending, which can be expected to result in more job cuts," says Challenger. Furthermore, Europe's debt crisis continues to threaten the U.S. financial system at a time when banks are already saddled with millions of foreclosed properties.
Also, massive cutbacks within the United States Postal Service are expected in 2012. Challenger estimates that involuntary layoffs at the Post Office could total as much as 120,000.
In December 2011, the number of job cuts announced by U.S. employers decreased by 1.6%, compared to November. However, the year end job-cut total was 14% higher in 2011 compared to that in 2010. The government sector saw a 29% increase in job eliminations from the prior year, while the financial sector saw a 165% increase compared to 2010.
Job growth in 2012 faces two big problems -- employers complain that they can't find the right people to fill vacancies and many job seekers are unable or unwilling to relocate to places where new jobs are created.
"Information technology, specialty manufacturing, nursing, and commercial construction are areas that are growing, but all of them require specialized skills," says Challenger. "Even areas like long-haul trucking, which is in desperate need of drivers, requires a certain level of training that many job seekers are unwilling to pursue."
TheStreet is tracking job cuts over the year. Click through to see what companies have announced layoffs so far in 2012... Next>
Kraft Foods(:KFT) plans to lay off 1,600 employees in preparation to split the company into a global snacks business and North American grocery business. Kraft , which announced its spinoff plans in mid-January, says that about 40% of the cut will be from its sales team. The reshuffling within the sales organization should be in place by April 1st and the split should be complete before the end of 2012.
Based in Northfield, Illinois, Kraft is known for its food products, including biscuits, cheese, beverages and other packaged grocery goods. The company operates in 170 countries and owns a number of iconic brands like Cadbury, Maxwell House and Oreo.
The split in its businesses will result in two publicly traded companies. One will include snack brands such as Trident gum and Cadbury chocolates. The other will focus on groceries businesses like Maxwell House coffee and Ocsar Mayer meats.
More layoffs may come as the company said that its latest workforce reduction plans do not include changes in its manufacturing facilities. Next> NOVARTIS
Novartis(:NOVN) is cutting 1,960 jobs in the U.S. The announcement comes as the company anticipates losing patent exclusivity on the drug Diovan in September 2012. The cost cutting measure also follows disappointing trials of Tekturna, another hypertension medication made by Novartis.
The company terminated trials of Tekturna after the pill caused complications for diabetes patients. Analysts say that growth will likely struggle in light of the charges the company is taking on Tekturna and generic competition for Diovan.
Basel, Switzerland-based Novartis has been cutting expenses since Joe Jimenez became chief executive officer in February 2010. The latest layoffs are the third time Novartis has announced job cuts in the past 14 months. The company announced 1,400 layoffs in November 2010 and 200 more in October 2011.
Of the 1,960 job cuts planned for the current year, 1,630 will be from the company's sales division. The reductions will save the company an estimated $450 million by 2013. Next> BARCLAYS
The U.K. banking sector still looks grim this year.
Barclays(:BCS) announced that it plans to cut 422 information technology jobs. Most of the cuts will take place in Britain as part of a restructuring plan of Barclays' technology and infrastructure division.
The move by the bank comes after rival firm Royal Bank of Scotland(:RBS) announced 4,760 job cuts, of which 3500 will be at RBS's investment bank and 950 in Ireland. Next> ROYAL BANK OF SCOTLAND
Britain's largest government-owned bank will slash 4,800 jobs over the next three years as it tries to get rid of unprofitable business units. The Royal Bank of Scotland(:RBS) cited volatile markets and costs due to new U.K. regulations as reasons for the layoffs.
The Edinburgh, Scotland-based bank said it will look to sell its loss making equities, corporate brokerage, equity capital markets and mergers divisions. In mid-January, the company said that it was in talks with "a number of potential buyers" for these operations.
"We are pulling out of business areas that are unprofitable and where we have weaker customer positions than the market leading group of competitors," said Chief Executive Officer Stephen Hester in a staff memorandum obtained by Bloomberg. "We are also scaling back resources in areas where market developments threaten our ability to fund ourselves sustainably and profitably."
Some 3,500 of the total job cuts announced will come from RBS's investment bank. The reductions follow 2,000 layoffs at the bank from the second half of 2011.
RBS's plans are yet another example of restructurings and layoffs underway at most major investment banks around the world. According to Bloomberg estimates, the global financial services industry saw 200,000 total cuts in 2011. Analysts say that some areas such as commercial banking have bottomed out in terms of cutting jobs. However, investment banking layoffs continue to dominate headlines as new regulations kick in. Chances that Wall Street will be a part of growing U.S. jobs recovery look bleak. Next> METLIFE
The largest U.S. life insurer will be shutting its home mortgage-origination operation, and as a result, cutting most of the 4,300 workers in the unit.
MetLife(:MET) said in October that it is putting its mortgage unit up for sale, following plans to sell it deposit-gathering operations to reduce federal oversight. In December, the firm agreed to sell $6.5 billion worth of bank deposits to General Electric(:GE).
MetLife's mortgage business could be hard to sell because of potential regulation complications. Another option the firm said it would pursue is winding down the business, which it estimates would cost as much as $110 million.
For now, the company plans to continuing servicing its current mortgage customers but will no longer accept new loan applications for forward mortgages. Next> MARINE CORP
The Defense Department estimates that the Marine Corp will lose 27,000 troops, suggesting that the public sector may yet cut into payroll figures going forward.
The shrinkage from 202,000 to as few as 175,000 troops is part of an estimated $1 trillion in Defense Department budget cuts over the next decade. The Marine Corp has already begun to offer early retire plans in preparation for these cuts.
The announcement was met with negative reaction with critics saying that the U.S. should take caution in its military adjustments as the threat of terrorism still looms and as China and North Korea seek to expand their military powers.
"We really need to ask ourselves whether this is the right time for such a significant change in U.S. defense strategy," said Rep. Duncan Hunter, R-El Cajon, a member of the House Armed Services Committee. "For me, the answer is a resounding 'no.'" Next> PHILADELPHIA SCHOOL DISTRICT
The Philadelphia School District is laying off 1,400 works in 2012. The district issued layoff notices to blue-collar workers who clean Philadelphia's classrooms and attend to buses, according to the Philadelphia Inquirer. The cuts are effective by year's end.
The move comes after the Philadelphia School District cut back 850 workers in September and more than 1000 teachers in the summer of 2011. Officials said they had to let some members in the school district's blue-collar union go after failing to extract concessions worth $16 million.
"As a result of this rejected agreement, there remains a budget gap that the district must close this year, and the district now anticipates it will face significant budget challenges in the coming years," said district spokesman Fernando Gallard in a statement. "The district is now forced to take other steps to achieve needed savings and to keep all of its options open regarding staffing in future years."
The current plans include cutting back 276 building engineers, 126 custodial assistants, 503 general cleaners, and 501 bus attendants. However, the final number of workers let go depends on how the dispute over the contract concessions is resolved. Next>
-- Written by Chao Deng in New York.
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