The economy appears to be gaining steam, but companies are still laying off hundreds of workers in the Dallas-Fort Worth area and thousands across the country.
What gives?
Economic growth has accelerated and consumer confidence is up. The nation added 1.6 million jobs in the first seven months of this year, up from nearly 1.4 million a year earlier.
And Texas has created nearly as many jobs so far this year as in all of last year. But experts say national and state economic indicators don’t necessarily reflect what’s happening in local markets.
The divergent trends of hiring and firing highlight a multifaceted economy that can act like a seesaw. Experts attribute the spurt in pink slips to consolidations, higher costs, seasonality and industry-specific cycles, among other factors.
In the Dallas area, two companies plan to close operations, cutting 252 jobs, and two others plan to lay off a combined 129 workers, according to filings last week with state officials.
And three big tech companies — Cisco Systems Inc., Dell Inc. and Microsoft Corp. — recently announced thousands of layoffs globally, with an unknown effect on North Texas.
Last month, U.S.-based employers announced 46,887 job cuts, the second-highest number so far this year after May’s 52,961 figure, according to outplacement firm Challenger, Gray & Christmas Inc.
That was up 49 percent from June’s 31,434 job cuts, the lowest number so far this year. For the first seven months of the year, employers planned to cut 292,921 jobs, down 1.3 percent from a year ago.
Industry trends
“It’s not just about what’s going on in the United States but what’s going on in a particular industry,” said John Doggett, senior lecturer in management at the University of Texas. “Economics for a leader of a company is all about what’s going on in my business and my industry.”
Last week, golf gear maker Adams Golf said it will close its Plano operations, cutting 138 jobs as part of a reorganization, but the other part of the story is the steady decline in the number of golfers, courses and spending over the last few years.
Financial documents show that sales at its parent company, TaylorMade-Adidas Golf Co., fell 31 percent in the first half of 2014 from a year earlier. Look at Challenger’s top five job-cutting industries in July: computers, government, electronics, aerospace/defense and retail.
All those sectors face major changes. Last month, Round Rock-based Dell announced an unspecified number of layoffs in a global restructuring as consumers shift from personal computers toward smartphones and tablets.
The company declined to estimate cuts for its Plano operations. California-based Cisco said last week that it would cut 6,000 jobs globally in the next year as it focuses on growth areas like cloud computing rather than networking gear. A company spokeswoman had no estimate of how many of its 1,280 employees in Richardson might be cut.
Consolidation fallout Increased global competition means more companies are outsourcing and consolidating to cut costs, said David Lei, associate professor of strategy at Southern Methodist University.
“Companies are looking at managing their financials as much as their operations” as they face rising Wall Street expectations for higher earnings, he said.
TaylorMade-Adidas is consolidating Adams Golf into its Carlsbad, Calif., headquarters two years after buying the company, according to a prepared statement. Microsoft said last month that it will cut up to 18,000 jobs, with about two-thirds related to its April acquisition of Nokia’s mobile phone business.
A company spokeswoman had no details about potential layoffs in the Dallas area or Texas. “You want synergies from M&A consolidations,” said Wilson Chu, co-head of global mergers and acquisition at the Dallas law firm K&L Gates.
“Do you really need two accounts payable departments? The dark side of synergies is pink slips.” Mergers and acquisitions are on the rise, driven by an abundance of cash, low interest rates and companies’ desire to expand into growth areas.
Global M&A deals hit a post-recession high of $1.6 trillion in the first half of this year, according to Mergermarket. Even as some companies hand out pink slips, others are hiring as they move to Texas, including the Dallas area, to benefit from lower business costs, Doggett said.
With the Texas unemployment rate at 5.1 percent and reports of worker shortages, laid-off workers may not have to wait long to find another job.
dallasnews.com
What gives?
Economic growth has accelerated and consumer confidence is up. The nation added 1.6 million jobs in the first seven months of this year, up from nearly 1.4 million a year earlier.
And Texas has created nearly as many jobs so far this year as in all of last year. But experts say national and state economic indicators don’t necessarily reflect what’s happening in local markets.
The divergent trends of hiring and firing highlight a multifaceted economy that can act like a seesaw. Experts attribute the spurt in pink slips to consolidations, higher costs, seasonality and industry-specific cycles, among other factors.
In the Dallas area, two companies plan to close operations, cutting 252 jobs, and two others plan to lay off a combined 129 workers, according to filings last week with state officials.
And three big tech companies — Cisco Systems Inc., Dell Inc. and Microsoft Corp. — recently announced thousands of layoffs globally, with an unknown effect on North Texas.
Last month, U.S.-based employers announced 46,887 job cuts, the second-highest number so far this year after May’s 52,961 figure, according to outplacement firm Challenger, Gray & Christmas Inc.
That was up 49 percent from June’s 31,434 job cuts, the lowest number so far this year. For the first seven months of the year, employers planned to cut 292,921 jobs, down 1.3 percent from a year ago.
Industry trends
“It’s not just about what’s going on in the United States but what’s going on in a particular industry,” said John Doggett, senior lecturer in management at the University of Texas. “Economics for a leader of a company is all about what’s going on in my business and my industry.”
Last week, golf gear maker Adams Golf said it will close its Plano operations, cutting 138 jobs as part of a reorganization, but the other part of the story is the steady decline in the number of golfers, courses and spending over the last few years.
Financial documents show that sales at its parent company, TaylorMade-Adidas Golf Co., fell 31 percent in the first half of 2014 from a year earlier. Look at Challenger’s top five job-cutting industries in July: computers, government, electronics, aerospace/defense and retail.
All those sectors face major changes. Last month, Round Rock-based Dell announced an unspecified number of layoffs in a global restructuring as consumers shift from personal computers toward smartphones and tablets.
The company declined to estimate cuts for its Plano operations. California-based Cisco said last week that it would cut 6,000 jobs globally in the next year as it focuses on growth areas like cloud computing rather than networking gear. A company spokeswoman had no estimate of how many of its 1,280 employees in Richardson might be cut.
Consolidation fallout Increased global competition means more companies are outsourcing and consolidating to cut costs, said David Lei, associate professor of strategy at Southern Methodist University.
“Companies are looking at managing their financials as much as their operations” as they face rising Wall Street expectations for higher earnings, he said.
TaylorMade-Adidas is consolidating Adams Golf into its Carlsbad, Calif., headquarters two years after buying the company, according to a prepared statement. Microsoft said last month that it will cut up to 18,000 jobs, with about two-thirds related to its April acquisition of Nokia’s mobile phone business.
A company spokeswoman had no details about potential layoffs in the Dallas area or Texas. “You want synergies from M&A consolidations,” said Wilson Chu, co-head of global mergers and acquisition at the Dallas law firm K&L Gates.
“Do you really need two accounts payable departments? The dark side of synergies is pink slips.” Mergers and acquisitions are on the rise, driven by an abundance of cash, low interest rates and companies’ desire to expand into growth areas.
Global M&A deals hit a post-recession high of $1.6 trillion in the first half of this year, according to Mergermarket. Even as some companies hand out pink slips, others are hiring as they move to Texas, including the Dallas area, to benefit from lower business costs, Doggett said.
With the Texas unemployment rate at 5.1 percent and reports of worker shortages, laid-off workers may not have to wait long to find another job.
dallasnews.com
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