The strong Australian dollar and high operating costs are taking their toll on Australian industry.
So far this year, we have catalogued 36 major job loss announcements. The layoffs are especially prevalent in the manufacturing sector which is losing about 75 jobs a day, or roughly one every 19 minutes.
|Major Job Cut Announcements|
|13-Jan-13||BlueScope Steel||170||Downturn in demand due to high $A|
|16-Jan-13||Boral||700||To reduce costs to 'a more sustainable level'|
|21-Feb-13||Telstra||648||Cost-cutting at its Sensis business|
|21-Feb-13||Origin Energy||350||Falling profitability|
|21-Feb-13||Iluka Resources||200||Response to sharp fall in full-year earnings|
|4-Mar-13||QBE Insurance||150||Cost cutting at its Sydney operations|
|28-Mar-13||Newcrest Mining||150||Cost cutting at Melbourne and Brisbane offices|
|08-Apr-13||General Motors Holden||500||Production uncompetitive against imports|
|07-May-13||SMR Automotive||90||Cutting contractors and voluntary redundancies|
|13-May-13||BAE Systems||100||Defence spending cuts|
|14-May-13||Coffey International||150||Project delays and weakening demand|
|22-May-13||GlaxoSmithKline||120||Redundancies at its Boronia plant|
|23-May-13||Ford Australia||1,200||Closure of Victorian car plants by 2016|
|24-May-13||Golder Associates||140||'Changed economic and industry conditions'|
|27-May-13||Crown||50||Reduction of admin and back office staff|
|11-Jun-13||WA Newspapers||100||Declining circulation|
|12-Jun-13||Target||260||Restructure of store support network|
|20-Jun-13||ANZ||70||Off-shoring of call centre jobs|
|27-Jun-13||Glencore Xstrata||450||Cost cutting at Newlands and Oaky Creek mines|
|22-Jul-13||Rio Tinto||78||Contractors sacked at Argyle mine|
|22-Aug-13||Murray Goulburn||72||Improve productivity and cost competitiveness|
|29-Aug-13||National Australia Bank||571||Cost reduction strategy|
|10-Sep-13||Elders Rural||150||Restructure of regional offices|
|17-Sep-13||Yancoal||60||Production cuts due to falling coal prices|
|25-Sep-13||CBH Resources||51||Low commodity prices and high production costs|
|25-Sep-13||Telstra||1,100||Cost cutting in its Operations division|
|26-Sep-13||Pfizer Australia||140||Closure of Sydney manufacturing plant|
|9-Oct-13||Westpac Banking Corp||65||Cutting managers in retail network|
|15-Oct-13||Toyota Australia||100||Voluntary redundancies at its plant in Altona|
|24-Oct-13||Simplot Australia||228||Downsizing of Bathurst and Devonport plants|
|25-Oct-13||IBM Australia||1,000||Restructure. Jobs to go in early 2014|
|25-Oct-13||Electrolux||544||Closure of factory in Orange, NSW by 2016|
|06-Nov-13||Caterpillar||200||Movement of production to Thailand|
|08-Nov-13||CSIRO||600||Hiring freeze on non-permanent employees|
|08-Nov-13||Qantas||300||Closure of Avalon maintenance facility in 2014|
|12-Nov-13||Seven Group Holdings||630||Slowdown in mining industry|
|20-Nov-13||BP Australasia||300||Cost-cutting at head office, fuel subsidiary|
|5-Dec-13||Qantas Airways||1,000||Job cuts after warning of massive full-year loss|
|Last updated: 5 December 2013|
In the near-term, it’s hard to see this situation improving. The gap between income per hour worked and productivity has developed into a chasm since 2002. The surge in incomes is much faster than in the previous decade and faster than in almost any other industrial country.
Unless productivity picks up dramatically, which is unlikely given recent trends in capital spending, incomes need to decline over the next several years. This is also a long shot which means that more layoffs are inevitable and more business closures and downsizing are on the horizon.
This has clear implications for the commercial property market, especially the demand for retailing and industrial warehouse space. In this regard, it is interesting that the S&P/ASX 200 Real Estate Index (A-REIT) has not bettered its mid-year peak of 1143.9, unlike the broader market which is at a five-year high.
If you know of other job cuts that are not on the list, or have other comments to make, let us know in the section below.