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Layoffs hit record numbers

A wave of corporate layoffs continues to roil the U.S. economy — taking a major toll on consumer confidence and retail sales — and is smashing all records for the number of people put out of work, reports Challenger, Gray & Christmas, the international outplacement firm, in its monthly tally of job losses.

During the month of July alone, 205,975 job cuts were announced, Challenger reported, creating a seven-month total of 983,337. In just seven months, the year-to-date total exceeds the tally for all of last year of 613,960 job cuts by more than 60 percent.

And that year-to-date total has already broken the record one-year total for layoffs set in 1998 with its 677,795 job losses.

Hardest hit so far this year is the telecommunications sector, where 175,350 jobs have been cut, compared to only 6,848 sector layoffs during all of last year. In the continuing dot-com meltdown, more than 101,000 computer industry jobs have been cut this year, almost 10 times the number of layoffs recorded last year in that industry.

Newspaper job ads flat in July

Help-wanted advertising in newspapers across the nation — a gauge of shifts in the job market — remained flat in July and sharply beneath its year-ago level, The Conference Board reported.

The Help-Wanted Advertising Index held steady at a reading of 58 in July, unchanged from the June figure, but has dropped a steep 24 points over the past 12 months, from a reading of 82 in July 2000.

Help-wanted advertising has fallen in all nine U.S. regions during the past three months, the business think tank reported. The deepest declines were recorded in the West North Central states, down 21.2 percent; the Middle Atlantic and West South Central regions, both down 12.4 percent; and the East North Central states, off by 10.8 percent. Over the past 12 months, ad volume has fallen across most of the country during an economic downturn, with declines ranging from 20 percent to 35 percent.

Stein Mart's 3Q sales drag down earnings

Off-price retailer Stein Mart Inc., based in Jacksonville, FL, said third-quarter sales are running substantially below expectations, pulling down profits for the third quarter and all of 2001.

Dismayed by the news, Wall Street punished the retailer's stock, knocking it down by 7.5 percent, or 64 cents a share, to a new level of $7.90 a share.

Same-store sales, which were negative through July, the company said, "have trended slightly positive in August. But, the retailer added, it has "had to increase marketing efforts and take more aggressive clearance markdowns during the quarter." If current trends continue for the remainder of the quarter, the company said it expects results to fall "somewhat below" Wall Street projections.

Given the third-quarter shortfall, "and in light of the continued weak retail environment," Stein Mart said it has revised downward its earnings estimates for the second half of the year and all of 2001. "If the current sales trend continues for the remainder of the year, the result would be net income of approximately 65 cents to 70 cents per share," the company forecast.

Saks to make debt exchange

Saks Inc., the money-losing department store retailer based in Birmingham, AL, said it plans to exchange about $450 million of its existing debt for cash and new debt.

In a weak environment for retail sales, Saks lost $42.4 million during the second quarter, sharply higher than a year-ago loss of $4.8 million. The loss prompted Moody's Investors Service to downgrade the retailer's senior unsecured debt one notch to "Ba2," its second highest junk grade. Standard & Poor's cut its rating of Saks debt to "BB."

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