Within a week of assuming office, President Barack Obama had to contend with the news of 50,000 jobs being axed on a single day on 26 January as construction-equipment maker Caterpillar, semiconductor manufacturer Texas Instruments, telecom giant Sprint Nextel, home-improvement retailer Home Depot, car maker General Motors and pharmaceutical giant Pifzer announced layoffs in the backdrop of the worst recession since the great depression of 1929.
The massive lay offs on a single day come as President Obama calls for an economy stimulus package of $825 billion in spending and tax cuts, though there is disagreement on the package with the Republicans wanting more tax cuts while Democrats are pushing for more spending on infrastructure.
Obama's plan is designed to protect or create 3 million to 4 million jobs in the next two years but economist have warned of more job cuts if the plan is not implemented at the earliest.
They feel that the stimulus plan is more psychological in nature to make people believe that the recession is temporary and businesses may not have to resort to lay off people as it is designed to give a psychological boost.
The stimulus plan will help people who have lost their jobs by giving them unemployment benefits and increasing funding for food stamps and companies may get tax incentives that would allow them to get refunds on taxes paid over the previous five years if they incurred losses in 2008.
Bringing the total jobs lost so far this month to 187,550, there seems to be no immediate solution for the Obama administration to resolve the economic crisis that he inherited, with the US economy having lost an estimated 2.6 million jobs last year, and the unemployment rate soaring to to 7.2 per cent, the highest in 16 years.
Telecom giant Sprint Nextel announced that it will axe 8,000 jobs, or 14 per cent of its workforce, in a cost cutting measure that will save the company $1.2 billion a year in expenses.
The layoff will take place at all levels of the company and the jobs to be whittled include about 850 employees who are going under a voluntary separation plan started in late 2008.
The layoffs will be completed by March and the company will take a one-time cost of more than $300 million in the first quarter of this year.
The company had lost nearly 3.5 million mobile phone customers between the third quarter of 2007 and the third quarter of 2008 and had posted a net loss of $326 million in the third quarter of 2008 and a net loss of nearly $1.2 billion for the first three quarters of 2008.
Home Depot, the world's largest home-improvement retailer, said it was cutting 7,000 jobs, or 2 per cent of its workforce and shutting its Expo home design centres and paring down corporate support staff.
The Atlanta-based company also said it would freeze salaries of its officers and close other specialty outlets, including five YardBIRDS stores and a bath remodeling business known as HD Bath as the demand for big-ticket design and decor projects has declined in the current economic environment.
The retail giant has been slowly cutting down on staff since last year, when it axed 500 jobs at its headquarters and 970 human resources jobs nationwide and closed 15 stores.
With the housing industry in the US is in the doldrums, President Obama is expected to use nearly $100 billion from the remaining half of the $700-billion banks rescue fund to help home owners facing mortgage foreclosures.
With Pfizer's acquisition of rival Wyeth in a deal valued at $68 billion, (See: Pfizer-Wyeth create $68-billion blockbuster deal) the the merged entity is expected to cut about 8,000 jobs from its current work force begining in the first quarter through 2011, and once the merger of both companies is concluded, another 15 per cent of the work force or nearly 19,000 jobs could be eliminated.
Construction equipment maker, Caterpillar said that it was shedding nearly 20,000 jobs through layoffs and buyouts, due to the global economic meltdown and the consequent scale back on production to match the decline in demand for the company's earthmoving equipment.
''These actions support lowering our production costs in line with a 25-per cent decline in sales volume and reducing selling, general and administrative and research and development costs supporting our machinery and engines business by about 15 per cent,'' it said in a statement.
The world's largest maker of bulldozers and excavators saw demand disappearing as dealers cancelled orders in the fourth quarter after nine months of record sales, with fourth-quarter net income falling almost a third to $661 million, from $975 million.
Semiconductor manufacturer Texas Instruments said that it will cut 3,400 jobs or 12 per cent of its workforce with 1,800 jobs being eliminated through layoffs and another 1,600 through voluntary retirements and departures due to decline in sales for electronic hardware.
The second-largest US chipmaker behind Intel, which itself is scaling back operations (See: Intel follows AMD in cutting down operations, to fire 5,000 employees), said that the job cuts will be completed by the third quarter and it will cost the company approx $300 million in severance payouts and other expenses.
Texas Instruments has seen its once-lucrative chipset business,used by mobile-phone manufacturers, losing sales as mobile phone manufacturers have started using multiple supply vendors.
The company reported a revenue of $2.49 billion for the fourth quarter, with profits down 86 per cent to $107 million.
Even prior to the current job cuts, the company had implemented a number of cost-cutting measures like putting a freeze on hiring, inventory reductions, temporary factory shutdowns and a voluntary retirement plan.
General Motors, which was bailed out by the government this month (See: General Motors gets $4 billion US government loan, Chrysler still in talks) said it will cut 2,000 jobs at two assembly plants in Michigan and Ohio and will halt production for several weeks at nine plants over the next six months because of slow sales.
The reductions will result in 1,200 hourly and salaried jobs being lost at Lansing-Delta Township plant Lordstown plant and 800 hourly and salaried jobs will be lost at the Lordstown plant.
The company said the layoffs are part of its efforts to "align production with market demand."