Are layoffs back?

Zachary Roth
July 19, 2011

Is one of the rare bright spots amid the recent gloomy economic picture now in jeopardy?

During the height of the Great Recession, in 2008 and early 2009, layoffs were common, as employers, faced with cratering demand, scrambled to cut costs. But over the last two years, mass layoffs have slowed dramatically. Of course, the unemployment rate has stayed high, largely because the average length of joblessness has steadily climbed, creating an army of the long-term unemployed. Still, layoffs have become relatively infrequent.

But if the last few days headlines are any guide, that could be changing.

• Cisco, the world's largest maker of computer networking gear, announced Monday it would cut 6,500 jobs--around 9 percent of its workforce. Around two-thirds of those losses will come from layoffs, the rest through an early retirement plan.

• The same day, Borders, the country's second largest bookseller, said it would liquidate, costing 10,700 jobs. It cited in part the "turbulent economy."

• And Wall Street giant Goldman Sachs said Tuesday it might lay off as many as 1000 employees around the world.

Of course, each of these events has its own backstory. Cisco's sales began to stall last year, and in May, the company first disclosed a plan to cut jobs. Borders has been a victim of changes in the book industry triggered by digital publishing. And Goldman Sachs is dealing with declining revenues in the wake of the ongoing global economic slump.

But taken all together, it's hard not to see the news as a grim indication of troubles ahead. The economy cratered in 2008, leading to widespread layoffs. It then looked to be headed for recovery in early 2010,and layoffs became scarce. Now, it has stalled again, prompting recent talk of a double-dip recession--and, perhaps, a return of the job-cutting we saw several years ago.