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CNN Live Today

IBM Announces Layoffs

Aired August 14, 2002 - 13:36   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL LIN, CNN ANCHOR: IBM -- we are moving on to some economic news -- is the latest corporation, corporate giant, to announce major layoffs. Big Blue says it will cut more than 15,000 jobs in reaction to the slump in technology.
Other industries are cutting jobs as well. They include the airlines, telecom companies, and manufacturing sectors.

Joining us now to talk about surviving the job slump, employment analyst John Challenger of Challenger, Gray & Christmas -- John, good to see you, thanks for joining us today.

JOHN CHALLENGER, CHALLENGER, GRAY & CHRISTMAS: Hi, Carol.

LIN: So, was it surprising to you at all to hear that IBM is cutting so many jobs?

CHALLENGER: Well, in some ways not, because we have just seen wave after wave of cuts in the tech sector. It just doesn't seem to stop. But this is a big one. IBM is one of the major companies, icon companies, and to see it cut this many people is certainly a sign that the recovery is not going to come any time soon in that area of the economy.

LIN: Yes, computers being one of the top five sectors to see layoffs this year. What are the others?

CHALLENGER: Well, certainly, telecom and electronics in the tech sector, but also automotive, travel, retail, manufacturing are all areas of the economy that have been seeing cuts.

LIN: And when you talk about retail, boy, the Ames department store announcing that it is closing stores as well today. So, what do you think this says about our overall economy, because this isn't just one sector two sectors, this is a pretty diverse selection.

CHALLENGER: Well, we have hoped now, through the middle of this year, that we were in recovery, things were starting to turn around, but all of a sudden, we are seeing the layoffs mount. We have seen just almost 50,000 cuts announced in the last two days. We had seen, for the last three months, three consecutive months, for the first time in over a year, under 100,000 job cuts. So you wonder, are we starting up again?

LIN: Well, who is hiring? Are there any growth sectors?

CHALLENGER: Sure, there are. This is not all bad news. Health care is a strong area of the economy. Defense and security, with the growth in that area. The whole home construction, mortgage banking, real estate area has been strong, and then government and education has been creating jobs.

LIN: So, for the people who are losing jobs in the losing sectors like technology, telecom, computer, retail, do any of those jobs translate into the sectors that are, in fact, hiring? Can they do that?

CHALLENGER: They do. Most of us are in jobs that are transferable from one industry to the next. So you could be a human resources professional coming out of manufacturing, and nothing says you couldn't do that in health care. In fact, 53 percent of people in the last quarter changed industries for a new job.

LIN: All right. Thank you very much, John Challenger. We will hope for better times, and at least there are sectors which are hiring. Thanks so much.

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