Chicago Prepares For Mass Layoffs: Mayor Daley

By: Mike Shedlock | Thu, Nov 13, 2008
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Chicago, The City That Works is facing a new reality. Mayor Daley has been warned by CEOs to Prepare For Mass Layoffs.

The warning is out - Mayor Richard M. Daley says a parade of corporate chief executives have told him huge layoffs are planned around the city and will carry into next year.

The news is especially alarming because the discussion concerns not just city jobs, but the private sector. Thus, it seems the City That Works is about to become the city that gets laid off.

Mayor Daley says corporate leaders told him huge layoffs will impact the city this month and next, and into the new year. He also says city, county and state governments should be prepared for their revenue to fall dramatically because of the souring economy.

"This is going to be all year, so it's going to be a very frightening economy," Mayor Daley said. "Each one tells me what they're laying off, and they're going to double that next year. We're talking huge numbers of permanent layoffs for people in the economy. It's going to have a huge effect on all businesses."

The mayor said the gravity of the situation cannot be underestimated.

"We never experienced anything like this except people who came from the Depression," Mayor Daley said. "When you have that many layoffs early - and they're telling me this is only the beginning of their layoffs - that is very frightening."

The City Council will take a vote on the 2009 city budget Nov. 19. The budget contains layoffs, a slowdown in police hiring, and new taxes and fines - some bad news for Chicagoans who remain employed.

Grim Jobs Forecast From Challenger

Challenger, Gray & Christmas, Inc. has a Grim Holiday Hiring Forecast.

Bleak conditions for retailers as the holiday selling period approaches are expected to keep seasonal hiring well below last year's level, according to the annual holiday hiring forecast released Monday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

"Retailers are facing an uphill battle this year. Consumers are tapped and credit is increasingly harder to come by. Meanwhile, retailers' shipping costs are ballooning thanks to gas prices, and the weak dollar is raising the price of imported goods. With profits already getting squeezed, most retailers are going to be reluctant to take on the additional cost of extra staffing," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

While Challenger anticipates some holiday hiring this year, it is expected to fall well short of the 727,500 seasonal job gains averaged over the previous decade. In fact, if spring hiring is any indication, this could be the weakest holiday hiring season since 2001, when retail employment grew by only 585,300 jobs, as consumer and retailer confidence plummeted in the wake of September 11.

According to Challenger, the best opportunities for seasonal job seekers will be at the large discounters like Target and Wal-Mart, which will be heavily favored by cost-conscious consumers this holiday season. However, job seekers may have to look beyond the sales clerk positions for available spots.

Job Cuts In UK

Bloomberg is reporting BT to Cut 10,000 Jobs; Second-Quarter Profit Falls.

BT Group Plc, the U.K.'s largest phone company, aims to cut about 6 percent of its workforce in the year through March to improve profitability after reporting a slide in second-quarter earnings.

Most of the 10,000 cuts, out of a workforce of 160,000, will be ``indirect labor' such as agency workers, contractors, subcontractors and offshore employees, the company said in a statement today.

The company aims to cut costs by 700 million pounds to 800 million pounds this fiscal year, Livingston told reporters in a conference call. The current economic slump "will get worse before it gets better," the CEO said.

Whether its Chicago or London, out of work consumers will not be spending much at Christmas. There will be no miracles for Chicago's Magnificent Mile shopping district this year. See Retail Tsunami Hits Gift Cards And No. 2 Mall Operator.

And as long as we are on the subject of Chicago, there is a Chicago Natural Resources Expo November 14-15 this weekend. The expo is free, and the focus is on gold, silver, mining companies, and natural resources. I will be on panels Friday evening and Saturday afternoon. Click on the above link for details.

 


 

Mike Shedlock

Author: Mike Shedlock

Mike Shedlock / Mish
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Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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