Virtually every industry will be affected by downturn, credit market issues
When the dot-com and housing bubbles burst, it was easy to see what types of jobs would disappear. But these days as nervous lenders cower and credit contracts, virtually every industry is likely to be scathed in the widely predicted downturn starting this autumn. Nearly every business relies on credit to operate — just as they need customers to have spending power.
With lending trimmed, and companies and consumers tightening their belts, jobs will be cut across broad swaths of the economy, from the tech sector to investment banking, and from manufacturing to soft drinks.
The four-week moving average of U.S. jobless claims hit its highest point in seven years, the Labor Dept. reported on Oct. 20. The average number of new jobless claims rose to 483,250 for the week ended Oct. 11, the highest since 2001. September’s unemployment rate was unchanged at 6.1 percent, but economists generally predict the labor picture will deteriorate in coming months.
“This is an equal-opportunity recession,” says Cathy Paige, a vice-president of Manpower, a temporary staffing firm that is experiencing softening demand from clients. “Everyone is feeling it.”
In any industry, the workers most vulnerable to layoffs are “bottom performers,” says Nancy Albertini, chairman of Albertini Group, an executive search firm based in Dallas. “Companies will say, ‘We’ve been meaning to eliminate these,'” she says. After trimming poor performers, companies will cut in areas not considered essential to operations, such as marketing, communications, and human resources. After these categories, any position is fair game, Albertini says, depending on the industry. What started in the financial sector with the failures of Bear Stearnsand then Lehman Brothers, is spreading to other industries. Housing, sure, but technology is no longer immune, and consumer brands have begun culling employee ranks.
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