Big Job Cuts a Threat to Economy’s Revival: UBS Joins Chemical Firms in Layoffs
As YCharts warned less than a week ago, with the gathering gloom about the global economy – China’s slowdown, Europe’s continuing malaise, the U.S. sliding sideways but for a boomlet of consumer spending – look for big companies to reduce headcount aggressively.
It’s what U.S. managers know best. Much of the recent boom in corporate profits has come from cost control and productivity gains, not from revenue increases, and big companies are finding it increasingly difficult at this stage of the recovery to manage sales improvements.
So, UBS plans to cut 10,000 of its 63,000 employees. The banking sector – think Citigroup (C), with a new CEO with something to prove to investors; JPMorgan (JPM); Bank of America (BAC) and Wells Fargo (WFC) – could be the source of big job cuts because super-low interest rates are squeezing their margins and earnings.
The nice trends in this chart would seem at risk.
UBS won’t be the last.
Jeff Bailey is the editor of YCharts, which includes the just-released YCharts Pro Platinum for professional investors.