Mass Job Losses Increase By 50 Percent

February 27th, 2009 by Reed Allmand

According to an article in the Dallas Morning News, the Labor Department reported that the number of mass job losses increased by 50 percent in January compared to 2008 numbers. The economy suffered over 235,000 job losses last month as employers shed jobs in an effort to stay in the black. Home Depot Inc., Boeing Co., Pfizer Inc. and Caterpillar Inc. all suffered massive job losses as they struggled with loss revenue from declining sales. But even with cutting workers, many companies are finding that they still are not able to stop the financial bleeding, so they’re using other tactics.

The article said:

But more companies are considering other cost savings, such as increasing health care premiums, eliminating employee benefits like tuition reimbursement, and reducing matching payments for 401(k)-style retirement plans.

Measures such as these often hurt some workers more than the actual job losses because it often causes them to experience a very real loss of income without actually losing their job. If an employee is forced to pay an additional $200 a month for health insurance, that’s like a $200 pay cut. Or, if he/she loses retirement matching funds this will need to be replaced by his/her own contributions, once again reducing the amount of income available for spending on a daily basis. Some of these cuts may even cause some employees to quit their jobs if the cuts make it impossible for them to afford to work and pay for the basics such as housing, food and health insurance. And of course if an employee quits he/she won’t be eligible to receive unemployment insurance benefits.