One day, thousands of job cuts: economic pain is deepening

TENS of thousands of job cuts announced by blue-chip companies in a 24-hour period are a warning sign for the world’s recovery and emerge just ahead of two key reports forecast to show limited progress in the US labor market.

In one of the biggest layoff announcements since the pandemic caused widespread economic shutdowns, Walt Disney Co. said late Tuesday that it’s slashing 28,000 workers in its slumping US resort business. In the hours that followed, the pace of job cuts at some of the world’s biggest companies — across in a range of industries from energy to finance — quickened.

On Wednesday, Allstate Corp., the fourth-largest car insurer in the US, said it will cut 3,800 jobs, roughly 8% of its workforce. And Bloomberg reported that Goldman Sachs Group, Inc. plans to cut roughly 400 jobs after temporarily suspending job reductions at the beginning of the crisis.

Announcements like these point to further challenges in a rebound that’s already slowed after an initial bounce back in May and June. Weekly figures due Thursday are estimated to show filings for US unemployment benefits remain far above pre-virus levels, while Friday’s jobs report — the last before the November presidential election — is expected to reveal that employers added a half-million fewer workers in September than in August.

The fallout isn’t contained to American firms. Royal Dutch Shell Plc announced it will cut as many as 9,000 jobs as crude’s crash forces billions of dollars in cost savings, while German auto- parts supplier Continental AG’s supervisory board approved a restructuring plan that will cut or shift 30,000 jobs worldwide.

The latest layoffs stretch beyond hourly workers, who were among the hardest hit at the start of the pandemic in industries such as restaurants and hospitality, to office and managerial positions.

While Shell didn’t provide a full breakdown of the cuts, a spokesperson said that positions in the top three layers of the company would be reduced by one-fifth.

The rout in the oil sector has been so swift and severe that once-sacrosanct corporate positions are being trimmed. Exxon Mobil Corp., which long prided itself on weathering crude-market crashes without resorting to job cuts, shocked investors and analysts in recent months when it targeted as much as 10% of US office staff for layoffs.

At Disney, the layoffs impact domestic employees in its themepark, cruise line and retail businesses. While two-thirds of the workers are part-time, the cuts also involve executives and salaried employees, the company said.

Halliburton Co., the world’s largest fracker, is eliminating an entire layer of management, while Marathon Petroleum Corp., the biggest independent US crude refiner, has embarked on its second round of job cuts that will affect about 2,050 employees, and is targeting salaried positions at plants in Texas, California and Louisiana.

With the pandemic still raging and US lawmakers having failed so far to extend federal help for the unemployed and small businesses, many key measures in the world’s largest economy look set to remain weak for some time.

There were signs earlier Wednesday that the outlook may have helped revive stimulus negotiations, but Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi failed to strike a deal during a 90-minute meeting Wednesday and said they will continue negotiating.

US airlines are preparing to lay off tens of thousands of workers starting Thursday unless they get additional federal aid. American Airlines Group, Inc. has warned that it could furlough 19,000 employees, while United Airlines Holdings, Inc. is planning to cut about 12,000. —