Thursday, January 11, 2018

A few more layoffs in Wis and the US recently. Don't panic...for now

While Wal-Mart may have gotten some nice PR by announcing they were going to boost its starting wage to $11 an hour (WOO-HOO! Benefits not included) and give some year-end bonuses to staff, you knew there had to be a catch. That catch was revealed later in the day.
Walmart is closing 63 Sam's Club stores across the US, the company told Business Insider.

Several stores were abruptly closed Thursday. In some cases, employees were not informed of the closures prior to showing up to work on Thursday.
Instead, they learned that their store would be closing when they found the store's doors locked and a notice announcing the closure, according to reports.

Ten of the affected stores will be turned into ecommerce distribution centres, and employees of those stores will have the opportunity to reapply for positions at those locations, a Walmart official said.

The remaining stores will stay open for several weeks before closing permanently. All of the affected stores were scrubbed from Sam's Club's website Thursday morning.

PR pay raises don't matter if there's no store

Included in that list are Wisconsin stores in Madison and West Allis. And the bad news kept coming as another notable Wisconsin retailer announced layoffs Thursday.
Middleton-based American Girl said Thursday it is cutting staff. Fifty-seven employees are losing their jobs, 21 of them in Wisconsin, effective immediately.

That amounts to a 3.2 percent work force reduction in Wisconsin, and 2.9 percent companywide.

"American Girl has been facing some major headwinds for the past several quarters," spokeswoman Julie Parks said. "The measures today were part of American Girl's ongoing efforts to truly control costs, align workforce with demand, and improve efficiencies where and when we can."

In the third quarter that ended Sept. 30, American Girl revenue was down 30 percent from the 2016 third quarter.
Many retailers announcing earnings and post-Christmas changes in the coming weeks, and given that the structural change from brick-and-mortar to online shopping seems to be accelerating, let’s see if there are more stories like this breaking in the near future.

Nationwide, the US reported the largest number of initial jobless claims in more than 3 months and the fourth straight week of increases, although at a seasonally-adjusted 261,000 claims, the number is still historically low. However, it was a bit concerning to see Wisconsin contribute to these recent increases, particular in the week before.
The largest increases in initial claims for the week ending December 30 were in New Jersey (+9,507), Pennsylvania (+6,850), Michigan (+5,920), Ohio (+5,773), and Wisconsin (+5,274), while the largest decreases were in California (-9,876), Kentucky (-5,485), Texas (-4,219), Oklahoma (-1,737), and Florida (-1,528).
Obviously with that being the “dead week” between Christmas and New Year’s, there’s not a whole lot to draw out of the one-week increase into a fuller picture of the economy. Further on in the jobless claims report, it says that Wisconsin’s big jump in claims was due to “layoffs in the construction, manufacturing, and transportation and warehousing industries,” which also seems weather and holiday-related.

But the advance initial claims for Wisconsin for the first week of January jumped another 1,908 claims from the higher amount of the previous week, and only 9 states had a higher increase for that week. It could be just a seasonal blip, but it may be worth keeping an eye on for the short-term.

There have also been a few other stories about companies cutting back in Wisconsin in the last few days. The most damaging one is likely what happened up in Price County late last week.
Layoffs at Flambeau River Papers surprised and shocked the community of Park Falls on Friday. The history of industrial papermaking in the city goes back more than a century.

Eighty-two people are now out of a job at one of the city's biggest employers.

Nearly 300 people were employed at the mill before the layoff. In a town of just about 2,300 people, it's a big change. Executives say it was a financial decision to make the mill more viable in the long run, but for the people who lost their jobs, they're just trying to find out what to do now.
It's been rough in the paper industry in general recently in Wisconsin, as over 500 people at the Appleton Coated plant are still out of work while that facility is being offered up to buyers, and Appvion announced in November it was laying off 200 people at its plant in Appleton and moving some operations out of state. Apparently right-to-work didn't save those jobs...

It still looks like the economy is growing decently despite these recent layoff notices, and I don't see anything yet that would cause any major drop in growth or cause the unemployment rate to go up much. But it also tells me things aren't as sunny as the still-rising stock market would indicate, and that there may be a few clouds rolling in soon despite the image that our GOP leaders are trying to have us believe exists in January 2018.

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