Holiday cheer dampened by layoffs

By ADAM GELLER The Associated Press 12/18/00 6:34 PM

NEW YORK (AP) -- Happy holidays. Just not for everyone.

Aetna Inc. and The Gillette Co. on Monday joined a growing list of companies that have announced large-scale layoffs in recent weeks, unsettling workers just before the holidays.

There is more going on than the usual trims and tucks companies often save for the fourth quarter. The pink slips are a tangible sign of a slowing economy and more layoffs are likely, analysts say.

"I wouldn't say that this market has gone soft," said Mallika Ishwaran, an economist at the Levy Institute Forecasting Center. "But it's definitely a turning point."

The evidence, experts say, are job cuts across a range of industries. General Motors, Motorola Inc., Unisys Corp. and Whirlpool all have outlined plans for layoffs, citing a tougher marketplace.

Aetna and Gillette said they will pare a total of 7,700 jobs from their payrolls.

Cuts have been deepest in the automobile, retail, industrial goods and financial services industries, said John Challenger, chief executive of the employee placement firm Challenger, Gray & Christmas.

He said monthly layoffs have risen to about 51,000 during the second half of this year, up from about 37,000 per month through June.

Still, layoffs have been constant throughout the last decade's economic expansion as companies remade themselves. Unemployment is still only 4 percent -- just off its 30-year-low -- and the jobless rate should remain low in coming months.

"A layoff in one company doesn't mean these people can't find jobs new jobs relatively quickly," said Joel Naroff of Naroff Economic Advisors. "The economy is still adding workers."

Economists differ on what the layoffs will mean for the economy.

Naroff said layoff announcements have often overstated the number of people who will actually lose their jobs, instead signaling positions that will go unfilled or hiring plans put on hold.

Some industries, particularly those rooted in technology, are still strapped for workers and are looking to expand, said Sophia Koropeckyj, senior economist at Economy.com in West Chester, Pa.

While many analysts say the overall layoffs are in line with projections of a "soft landing" for the economy early next year bringing slower, but sustained growth with minimal inflation.

Others see signs of danger.

"As a snapshot, it is not bad. But if you look at it in the longer term, as the economy slows even further, yes, this is definitely going to become a much bigger problem," said Ishwaran, who forecasts a recession by the middle of next year.

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-- Martin Thompson (mthom1927@aol.com), December 18, 2000