On what CNN Money is terming “Bloody Monday” (yesterday, January 26, 2009), a record-breaking 71,400 jobs were cut in a single day. Seven renowned manufacturing and service-related companies, from construction giant Caterpillar to mobile-device retailer Sprint-Nextel Inc, are slashing jobs like never before. Home Depot, the largest home improvement retailer in the world, has reportedly cut its EXPO Design Center from the corporate conglomerate, leaving over 7,000 former employees without jobs. World famous electronics manufacturer Texas Instruments, perhaps best known for their calculators, has cut 3,400 jobs in order to, “cope with weak demand and the slowing economy.” (www.cnnmoney.com). These few companies are just a handful of the corporations suffering under the weight of a crippled economy, ready to buckle under utter financial strain.
Sprint-Nextel, the nation’s third largest mobile device carrier, has announced the largest amount of layoffs in the company’s history, according to Chief Executive Dan Hesse. The cuts, which are scheduled to be completed by March 31, will result to a 14 percent reduction of the company’s 56,000 current employees. (www.foxnews.com: “Struggling Sprint-Nextel to Eliminate 8,000 Jobs”). These reductions stem from the company’s desire to cut annual costs by $1.2 billion. Remaining Sprint-Nextel employees will be struggling as well, as salary increases and pay raises have been frozen until further notices and 401K plans have been put on hold completely. According to Hesse, “Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment. Our commitment to quality will not change.” The continued competition from wireless device providers Verizon and AT&T (previously Cingular Wireless) are also to blame for Sprint’s poor performance over the last year. According to statistics, Sprint has lost over 3.5 million subscribers since September 30 from its overall subscriber base of 50.5 million. The majority of these users have gone to Verizon and AT&T.
What or who is to blame for such mass job loss? It seems economic specialists are content to blame the American consumers for such downfall, citing their financial inability to purchase such items or afford such services. According to Robert Brusca, chief economist at Fact and Opinion Economics, “It’s all about the consumer, and the consumer has been hit hard. It’s a vicious circle as weakness begets layoffs, which beget more spending weakness.”
Our nation’s new President is set to attempt to help the crumbling economy via his stimulus package. Obama will be meeting with congressional Republicans today, Tuesday January 27, 2009, to discuss his $825 billion “American Recovery and Reinvestment Act.” According to CNN analysts, key Senate committees will likely vote on the plan today and a full House vote could come as early as tomorrow. This meeting with the minority GOP will have a tremendous impact on the future of Obama’s presidency and administrational decisions. Republicans will be sizing up the new president and deciding how much they will attempt to work with him in the future. No doubt the division between House and Senate Democrats and Republicans is part of the problem Obama desires to resolve, as Republicans are currently criticizing Obama’s recovery plan, citing its inability to provide an economic fix quick enough.
Whether or not Obama’s plan will add to our national debt remains to be seen. Indiana representative Mike Pence stated that the current draft of the bill “won’t stimulate anything except more government and more debt.” Pence is yet another member of the House GOP leadership.