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Wednesday, 10 December 2008

Sony job cuts

Sony have shown once again that the current economic downturn and job cuts are not limited to the banking and financial sectors.

Sony have announced that 16,000 jobs will be cut from their worldwide operations, a significant number of these will be in Asia.

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Saturday, 22 November 2008

Recession and job losses

With the globe entering recession many jobs are going to be cut across the whole world over the next 12 months and perhaps beyond.

Just this week major companies around the globe announced over 80,000 job cuts. Firms in the US are shedding jobs at a rapid pace, UK unemployment is expected to double over the next year and European unemployment, which had been falling sharply in previous years has begun to increase again.

These job losses are not only going to be in the financial sector, although there will be a lot of job losses in this sector. Citigroup alone is expecting to reduce headcounts by 75,000. However, jobs are being lost across the board in construction, retail, business services, manufacturing etc. The only place that employees can feel fairly confident of job security is in the public sector, however, I wouldn't be complacent anywhere!

Things are looking fairly bleak at the moment as we are currently in the heart of the storm. I'm not saying that the storm is not going to get worse but sometimes when you are in a downturn it seems like it will never end.

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Wednesday, 16 January 2008

Labour market statistics - hiding the start of slowdown 2008

As I mentioned yesterday the Labour market statistics were released today, and as I expected they have yet to highlight the slowdown in the wider economy. However, with economic statistics, looking at one months worth of data can be very misleading, especially when you fail to put it in the wider context.

Looking at the monthly data nearly all the data was good news for the UK economy. Unemployment was down, employment was up and the number of people claiming benefits was down. This looked like a continuation of a very successful period of labour market expansion.

Nevertheless, these figures hide the variations caused by end of year demand for employment in financial services and Christmas employment in the retail and leisure sectors.

I would expect to see in first quarter of 2008 being a much less impressive year for the labour market. With retailers likely to have suffered a very tough Christmas, employment in these sectors is set to fall. The banks and other financial institutions are also expected to cut employment. Citi has already announced planned cuts of around 20,000 jobs worldwide - many of these are likely to be in London.

What is of a greater concern is that these figures may delay decisive action by the Bank of England. Today's release indicated a pick up in the rate of wage inflation, which in turn will stimulate general levels of inflation. As such, with the prospect of increased inflationary pressures, the Monetary Policy Committee may decide to be more cautious about cutting rates.

Today's data is likely to be one of the last bits of positive labour market news in 2008. Tougher times have already arrived for many people, the data will catch up in February and March to prove this.

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Sunday, 11 November 2007

Things not looking up for next year

Some of the third quarter figures from the United Kingdom and the United States looked fairly positive. In particular the employment and the GDP growth figures looked pretty good without any real sign of the current credit crisis having a wider impact on the wider economy. However, don't be fooled the downturn is coming in both the UK and the US and very likely in the EU.

Early data from Q4 suggest that activity in both manufacturing and services has been slowing down in recent months. The view on the high street is that the consumer is losing confidence and are more than likely to put the breaks on spending - particularly as they have few savings to cover them over the slowdown.

The financial sector is far from over the worst of the sub-prime mortgage crisis, with a number of big banks still to declare just how much exposure they have had. This sector should expect more bad news, job losses and a much reduced pool for the Christmas bonus period.

The housing market is unlikely to see significant price falls at a national level but certain locations will see prices drop.

Therefore get prepared for next year, people will be losing jobs, wage growth will come under pressure and nothing will feel as secure. Make sure you shine and work and that your boss understands that to lose you to save money in a downturn is a bad move over the longer term. Things should get back to normal come the end of 2008, don't get stung in the meantime.

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