Many Big Firms Planning Layoffs : Unemployment: Economists see start of widespread job scaleback as the economy stalls.

Citicorp, General Dynamics, Aetna and General Motors are only a few of the major employers that have announced layoffs in recent days. Many economists say it could be just the start of a widespread job scaleback as the economy stalls.

“There will be more layoffs, the unemployment rate will rise, job market conditions will deteriorate for the next six months or longer,” said Bruce Steinberg, an economist at Merrill Lynch & Co.

“We haven’t had a recession for so long that people forget what happens,” he said.

Some economists said service jobs may be hit hardest. That’s due partly to the boom in the banking, finance, advertising and other service industries in the 1980s that allowed these firms to grow fat.

Finance and banking companies “were basically taking anyone who could walk through the door,” said economist Robert Dye of the Wefa Group, an economic forecasting firm in Bala Cynwyd, Pa.

But in the face of increasingly grim economic forecasts and figures--compounded by the economic shock from the Persian Gulf standoff--these companies have been letting workers go in droves. Citicorp, for one, said it will eliminate 2,000 jobs by the end of next year.

“They grew too fast and this is the consequence of growing too fast, a shakeout if you will,” said Kenneth Goldstein, an economist with the Conference Board.

The slowdown among financial companies began with the Wall Street crash of October, 1987, but it has since intensified as small investors have grown more cautious and avoided the stock and bond markets.

The crash, along with the end of the real estate boom and the spread of the savings-and-loan crisis, also hurt banks and insurers.

Manufacturing companies have fared somewhat better because they learned from the last recession eight years ago to keep operations lean, economists said. But the recent economic sluggishness has prompted many of them to lay off workers as well.

In perhaps the largest such cutback, General Motors Corp. said it will close four plants and idle others temporarily, affecting thousands of workers. Experts say GM is responding to excess car-making capacity as well as to the economy.

State and local government jobs also are facing cuts due to withering tax revenues. Reductions are planned by Massachusetts, Virginia and the city of Pittsburgh, among others.

THE PINK SLIP ROLL

A sampling of layoffs and other job reductions announced this week:

Citicorp -- Nation’s largest banking company plans to eliminate 2,000 jobs by the end of next year as it cuts back corporate finance activities.

General Dynamics Corp. -- Budget cuts and declining demand for its F-16 fighter jet will force the laying off of 700 to 1,000 employees in January.

Lee Co. -- Jeans maker plans to lay off 800 workers as it closes three plants by year’s end.

Martin Marietta Astronautics Group -- Colorado-based firm eliminated 835 jobs this year and expects similar reductions next year.

Bethlehem Steel Corp. -- Plans to lay off 450 employees from its Ebensburg, Pa., coal mine by Christmas because an abundance of coal on the market is driving prices down.

Merrill Lynch & Co. -- Management shake-up designed to cut costs may result in the loss of several hundred jobs.

SOURCE: Associated Press