Shock waves from the global financial crisis are now being felt in almost every corner of working America as companies press the eject button on increasing numbers of employees.

While the ax has been falling for months in the financial and home-building industries – where the current economic downturn started –  as well as the Detroit auto industry, makers of everything from soft drinks to water filtration systems have unveiled hefty rounds of job cuts in recent weeks as they brace for what some predict could become a long and deep recession.

In the past week alone, companies including PepsiCo and Danaher Corp. said they would lay off thousands of workers, while the state of Massachusetts disclosed plans to cut its payroll by 1,000 as it faces a tax shortfall.

The situation is poised to worsen as the holidays approach and many businesses scrutinize budgets for the coming year. The sad truth is that Christmas layoffs are common in tough times.

"It's a fairly grim outlook," said Michael Goodman, director of economic and public policy research at the Donahue Institute of the University of Massachusetts. "I don't know of any sector of the economy that will be spared."

A four-week moving average of new U.S. government jobless claims last week hit its highest point in seven years.

Ed Yardeni, chief investment strategist for Yardeni Research, is hoping that the U.S. government's $700 billion bailout package will slow the job cuts.

"If this rescue plan doesn't work, then... you could see something much worse that could feel like a recession or a depression, with all sorts of people losing jobs," Yardeni said.

A survey of more than 100 chief financial officers and other senior executives - conducted Wednesday - found 56 percent expect to reduce payrolls over the coming year. A majority polled by CFO Magazine also predicted falling revenues and plan to cut operating costs by at least 5 percent.
(Reuters)