A growing number of U.S. companies are sending workers a grim holiday message: Head for the unemployment line.
Aetna Inc., Cooper Tire & Rubber Co. and Western Digital Corp. said yesterday they would cut a combined 4,900 jobs. Eastman Chemical Co. said it would cut an unspecified number as it tries to slash costs by $100 million in 2009.
The recession has spread far beyond the housing and banking businesses where it began, battering workers in nearly every sector of the economy. Cooper Tire said it would cut 1,400 jobs. Western Digital, which makes computer hard drives, said it planned to cut 2,500.
Aetna, the third-largest U.S. health insurer, said it was cutting 1,000 jobs - 2.8 percent of its workforce - to reduce costs and focus on growing areas. The Hartford, Conn., company said 165 of the cuts would be in Pennsylvania, mostly in Blue Bell.
The reports came a day after drugmaker Bristol-Myers Squibb Co. said it would eliminate 800 jobs by the end of this year.
"Things are changing so rapidly, and deteriorating so rapidly, that firms don't have a choice," said Nariman Behravesh, chief economist of IHS Global Insight Inc. "It looks like the economy is in somewhat of a free fall."
Falling sales are squeezing companies' cash just as tighter credit makes it harder for them to borrow to fund operations, Behravesh said. The combination means some companies cannot afford to wait until after the holidays to cut jobs.
Moreover, many people with jobs are so fearful about their employment security that families are reducing spending, giving retailers one of the worst holiday shopping seasons in decades.
The recession that began last December could last through the third quarter of 2009, said Aaron Smith, a senior economist with Moody's Economy.com in West Chester. Unemployment will likely continue to climb from the current 6.7 percent to about 9 percent by early 2010, he said, even though the economy could start growing again in the fourth quarter of next year.
Even companies that make escapist products that have weathered past recessions are feeling the pinch now.
Midway Games Inc., maker of the popular "Mortal Kombat" video game series, said this week it would cut its head count 180 people, or 25 percent of its workforce, close a studio in Texas, and halt development of "noncore" games. Also, book publisher Macmillan said this week it was eliminating 64 positions, nearly 4 percent of its workforce.