Layoff Monitor

Click here for the layoff spreadsheet!

I have counted 67 companies and government agencies that have announced layoffs in December thus far, up from 30 firms in November. I am sure I am missing some in both months, but the +100% jump is quite telling.

Every week I will publish, via a Google Docs link, a list of companies that I can find that are laying off employees. This will give us all a sense of the seriousness of the economic situation and the eventual impact to the stocks we are investing in.

Bottom line is if consumers are losing their jobs, they are likely to cut back on purchases in a significant way. I have several well-off friends who are employed but concerned about their jobs so they have curtailed all discretionary spending from clothing, to electronics, to restaurants, to travel, etc. And big ticket items like jewelry and autos have essentially grounded to a halt. This is suggesting to me that more pain lies ahead and that there is more downside to equities unless the government’s efforts can turn this around.

Some Observations:
• Finance companies dominate – no surprise here.
• However, all other sectors such as Tech, Telecom, Retail, Autos, Travel, etc.
are being impacted by the economic slowdown
• Notice that, on average, the percent of employees laid off is less than 10%. The bulls would argue that, because of this low number, the situation isn’t as bad as we think and that the economy (&stocks) will be sustained throughout this rough period. I argue the opposite. This suggests to me that companies have given themselves room for more layoffs. Thus, I am expecting more layoff announcements from the existing companies on this spreadsheet (in addition to new ones), which is likely to lead to a cycle of less purchases by consumers, which could lead to more layoffs. Again, this suggests to me that further downside exists for equities. I hope I am wrong.
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