It's Raining Pink Slips

By Rick Aristotle Munarriz
November 11, 2009 | Comments (8)

Recs

10

If you thought that last week's wave of corporate layoffs was it -- one last desperate gasp before the recovery lifts all ships -- it's time to call for a lifeguard.

Several companies are at it again this week, and it's only Wednesday.

  • Electronic Arts (Nasdaq: ERTS) is letting go 1,500 employees, or roughly 17% of its workforce.
  • You'll need to Photoshop 680 hires being displaced at Adobe (Nasdaq: ADBE) into this year's holiday party portrait.
  • Sprint Nextel (NYSE: S) may have cut dozens of posts in its wholesale business last week, but the wireless carrier is now slashing 2,000 to 2,500 positions.
  • Pfizer (NYSE: PFE) will close down six R&D centers, eliminating an unspecified number of jobs in the process.
  • Time Warner (NYSE: TWX) laid off 100 employees from its AOL subsidiary yesterday, readying the struggling online arm's spinoff.

The deluge of pink slips comes at a crummy time, in terms of both the upcoming holiday season and at a time when some signals are pointing to an economic turnaround.

Welcome to the fork in the road, investors. Who do you believe at this point? Even as many economists feel that the worst is behind us, companies that know their future prospects the best are hunkering down.

After covering last week's workforce dismissals, I asked readers what they thought. As of this morning:

  • 51% feel that the economy is going to get worse.
  • 34% believe that things are getting better.
  • 15% aren't sure of the economy's direction.

The sample of 274 poll participants just like you isn't perfect, but it clearly indicates that a lot of people are skeptical about the economy's prospects. With so much spent on stimulus packages and bailout plans, what's behind Door No. 2 if the doubters are right?

What would you do to get companies in hiring mode again? Share your blueprints in the comment box below.

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Adobe Systems and Electronic Arts are Motley Fool Stock Advisor selections. Pfizer and Sprint Nextel are Motley Fool Inside Value recommendations. Try any of our newsletter services, free for 30 days. You won't be able to "lay off" them once you check them out.

Longtime Fool contributor Rick Munarriz is not a fan of layoffs in good times. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 11, 2009, at 1:43 PM, plange01 wrote:

    the first christmas for the US in a depression since the 1930's over 20% of the workforce is already unemployed and its rising fast!

  • Report this Comment On November 11, 2009, at 1:47 PM, VegasMartin wrote:

    Microsoft let a bunch of employees go recently too.

    http://www.ShootTheBears.com

  • Report this Comment On November 11, 2009, at 6:28 PM, Midas5280 wrote:

    Perhaps we should all go into healthcare. That said, when people aren't working, elective procedures aren't being done. Many hospitals are laying off contrary to what the media would like us to believe.

  • Report this Comment On November 11, 2009, at 6:34 PM, richie54 wrote:

    So, everyone's lying. Isn't that the American way?

  • Report this Comment On November 11, 2009, at 7:15 PM, xetn wrote:

    The only sector of the economy adding jobs is government. Perhaps GDP isn't worth the paper it is written on. This is discussed in some detail here:

    http://mises.org/daily/3843

  • Report this Comment On November 12, 2009, at 2:35 AM, ET69 wrote:

    Nurses are being laid off even in nursing homes! How is that possible? Because the state govs cut our reimbursements for medicaid pts and so the nursing homes only want medicare pts which pay much more and prefer an empty bed rather than a medicaid filled bed. Great system eh?

  • Report this Comment On November 12, 2009, at 11:56 AM, jesse2159 wrote:

    This economy will bounce along the bottom for several more years, just as Japan's did since 1989. There will be no financial giant leaps forward, nor any falling off the cliff. Look for 2%-3% per year in housing, new jobs and investments. It will be very slow and very,very painful for some. But no one will get rich either. Remember, the world's economy follows nature,...it seeks it's own level and balance regardless of all other factors.

  • Report this Comment On November 16, 2009, at 10:27 PM, wheelen15 wrote:

    Companies will use the recession and all the media hype around it to cut employees (but avoid detracting from their public image) and get more out of the remaining by using the layoff fear factor. It's a buyers

    market in the enterprise employment arena and really has been long before this self induced economic crisis. Laid off due to outsourceing of offshoring or

    cheaper imported help. No problem because you'll

    be retrained for a better job anyway. After all, it is now a global economy....The economic infrastructure of America has been pilaged and mismanaged by the corrupt and/or bumbling political and business leaders.Nobody, has any idea , when any aspect of

    the ecomomy, will return to prosperous levels. What

    will happen (and has been happening), is the media

    will keep feeding misinformation, in the form of

    optimistic predictions for the future along with rationalized explanations for former missed predictions of improvements that never materialized

    to the millions of working class americans that keep

    plugging away wondering if things were getting better

    or were they just getting used to "less bad" Back to the question,,,next year, 2nd quarter, hiring marathon

    all sectors, you just wait and see.

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