More companies announce mass layoffs
As the Labor Department reported that the number of people applying for unemployment claims hovered around a 26-year high last week, several companies announced major job cuts.
Intel Corp. said it plans to slash 6,000 manufacturing jobs because of weaker demand for personal computers, the Associated Press reported. The high-tech company plans to close three “assembly test” facilities in Malaysia and the Philippines and will stop production at plants in Oregon and California. The changes are expected to be finished by the end of the year.
Meanwhile, Microsoft said today it will cut 5,000 jobs or about 5 percent of its work force as the economic downturn affects demand for software, Bloomberg reported. The job reductions are Microsoft’s first company-wide firings. The company expects to save $1.5 billion.
The announcement came with the company’s fiscal second quarter earnings report, which showed that net income was $4.17 billion, or 47 cents per share, compared with $4.71 billion, or 50 cents per share, a year earlier. The company expects sales and earnings to drop in the second half of its fiscal year ending June 30.
UAL Corp., parent company of United Airlines, said it will cut 1,000 jobs this year after posting a fourth-quarter loss of $1.3 billion, the Los Angeles Business Journal reported. This cut, along with layoffs announced in December, will reduce the airline’s work force by 30 percent.
Jobless claims for the week ended Jan. 17 rose to a seasonally adjusted 589,000 from 527,000 the previous week. The number of people continuing to seek jobless benefits hit 4.6 million, an increase of 97,000, the Associated Press reported.