The news this week has been about how many thousands of people have been made redundant due to the ongoing downturn. The BBC leads today with the news of how 3,000 Royal Bank of Scotland staff are being laid off. The Times ran with news of how 4,000 people a day are losing their jobs.
Shocking?
Let's take a little look at the figures. The first announcment this week was from Virgin Media who said they're going to cut 2,200 jobs. But when you read the detail they're not cutting them until 2010. And even then it's part of a restructure. Virgin Media has billions in debt and has been struggling to carry it for some time. It's also still got some of the inefficiencies left over the merger of NTL and Telewest who in turn were formed from other cable operators.
Maybe BT as a national giant is more reflective of what's going on. They've said they're going to cut 10,000 positions by March next year. But the detail is that 4,000 have already gone and the majority will be made up of agency and contract staff. Not good but not as bad as it seems. And BT have made it clear that again this is a result of efficiency improvements and nothing to do with the downturn.
OK, so Yell, the Yellow Pages publisher might give us a more realistic understanding of what's going on. They're losing 1,300 staff as part of a £100m efficiency drive. Yell are blaming the downturn saying many advertisers are holding off placing ads. The reality is that Yell has £3.8bn, yes billion, in debt. How you run up that much debt printing telephone directories is beyond me. But after annoucing profits of £118m this week it should only 32 years to pay it off. Yell's problems are much bigger than anything that's happened as part of the downturn. At least chief exec John Coudron is on the case. He flew 100 staff out to Spain to celebrate and hired the Sugababes to perform but when they cancelled he handed them £1,000 each to make up for the disappointment.
RBS announced today that they're slashing 3,000 jobs to cut costs. RBS suffered a big shock earlier this year when it figured out that lending money to people who couldn't pay it back to buy overvalued houses wasn't a good business model. Luckily the Government is willing to pay £20bn to help RBS learn from it's mistakes. Delving into the detail a third of the job losses will be in the UK, so that'd be 1,000 then.
The BBC quotes 18,000 job losses this week. The reality is closer to 8,000.
Any job losses have a negative effect on the economy and the market we're in. But inaccurate journalism has a big effect too. The Times reporting 4,000 job losses a day is sensational journalism and nothing else.
We need to get through the downturn and get back to business as usual. We need those people to find work. We don't need to talk ourselves further into a recession.