I caught a not-very-cheerful Reuters’ news item the other day. Human resource giant Career Protection, Inc. predicts a 37% increase in companies planning layoffs and RIFs (Reductions In Force) for 2008, as compared with last year. The one bright spot is that most of these companies will be offering severance packages.
In an earlier blog, I discussed slowdowns at Chrysler, Ford, and GM, especially severe because of their main supplier of plastic parts having filed bankruptcy. GM, in fact, plans to cut its U.S. labor costs in half, and its newest contract with the UAW union allows it to replace up to 16,000 non-assembly jobs with new, less expensive hires.
In addition to actual layoffs, what we can expect to hear a lot of is buyout offers, especially for workers 50 years old and older. And, make no mistake. These offers will apply to lots of workers. More than 21,000 USW workers at GM alone are eligible for full retirement, and Career Protection points out that other retirement options are available for 25,000 more. Actually, none of these statistics came as a surprise to me, but here’s one that did: BMW announced it’s cutting up to 8000 jobs. These will be mostly in Germany, but still, we’re not used to hearing about big labor cuts outside our country.
I’ve been practicing bankruptcy law in Indiana for a long time, and as you know by now, I’m always reading up on economic events in order to know what’s going on. That helps me offer realistic and timely advice to my Indiana bankruptcy clients. Tell you what – I’ve been counseling debtors for almost a quarter of a century, and it’s a whole new ball game now. I heard a comment that a young person starting a career today can expect to be laid off three or four times during his or her work life. That, as we’re already starting to see, will present a whole new set of challenges. Most people will adapt and survive, as always happens. But in cases where the “chips” of divorce, job loss, and illness fall all at the same time, well, it’s going to be tough. Thankfully, Indiana bankruptcy law is there as a safety net.