Thread: Global unemployment heads towards 50 million

From The Times
January 29, 2009

Global unemployment heads towards 50 million

Carl Mortished, International Business Editor

Unemployment is mounting around the world as big international companies, including Boeing, Starbucks, ConocoPhillips, GKN, in Britain, and SAP, of Germany, rush to cut costs.

The jobs scythe, which could put 50 million people out of work worldwide, according to the International Labour Organisation (ILO), is reaching beyond the financial sector and into every corner of the global economy.

The employment attrition, which began last September with the collapse of Lehman Brothers, the investment bank, is bearing down on blue-collar and managerial staff in the aerospace, motor, energy, retailing and electronics industries.

The rapidity of the downturn and the speed at which the corporate sector is responding with job cuts is creating alarm. Oil company bosses, who months ago were complaining of skill shortages, are now slashing jobs after a precipitous fall in oil prices.

ConocoPhillips, which yesterday revealed a fourth-quarter loss of $32 billion (£22.3 billion), said that it would cut 1,300 jobs. The message is expected to be repeated today by Royal Dutch Shell and by BP next week when the two companies announce their 2008 results.

Rising unemployment could lead to social unrest, the ILO predicted yesterday as the International Monetary Fund (IMF) forecast a deep global recession with a severe contraction in the UK economy. The ILO report says that unemployment could rise by between 18 million and 30 million this year, and as much as 50 million if the world economy continues to deteriorate. In its worst-case scenario, global unemployment, which stood at 179 million in 2007, could rise to 230 million.

Juan Somavia, the ILO director-general, said that the world was facing a global jobs crisis. A job cull that in Britain began in London’s Canary Wharf financial centre is spreading rapidly across the country, with news that Shop Direct, formerly known as Littlewoods Home Shopping, will close a Liverpool call centre, ending employment for 1,150 people. GKN, the engineering group is to lose 1,400 jobs worldwide.

In America, Boeing revealed a surprise fourth-quarter loss of $56 million and news that it would lay off a further 5,500 workers, adding to an earlier warning that it would cut its headcount by 4,500. The software and electronics industries are not being spared: SAP, the German group that is the world’s biggest business software company, is to shed 3,000 staff. It said that its business had been disrupted “by the worst economic and financial crisis the world has witnessed in decadesâ€

Out of nearly 7 Billion People?////