Consumer confidence falters as thousands of jobs disappear
Thousands of workers were told on Thursday that they would lose their jobs amid growing signs the labour market is deteriorating.
As Ford said it would cut 1200 jobs when it stops making cars in Australia, the entire 2500-strong staff of cleaning company Swan Services were terminated.
Swan had employed about 500 cleaners in each of Victoria and NSW, according to union estimates.
Ford's move in 2016 puts thousands of other positions at risk in the parts industry, which will lose one of its biggest customers.
Households are also growing more gloomy, with a Westpac index showing expectations of job prospects had worsened.
Swan provided cleaning services to offices and shopping centres and administrators its directors appointed on Wednesday quickly laid off the entire cleaning staff.
An administrator from Pitcher Partners, Anthony Elkerton, said the company had been unable to cover the wages bill, so it had been forced to eliminate all the positions. "We have terminated all employees and we are currently in the process of formally notifying them," he said.
"There are a number of sites where staff have been re-employed by other contractors."
The national president of the union United Voice, Michael Crosby, said Swan had been one of the five biggest cleaning businesses in the country, and its woes followed a string of collapses in the industry.
"Swan Services could potentially owe cleaners hundreds of thousands of dollars in entitlements, including annual leave, sick leave, unpaid wages, superannuation and we want to ensure they are protected," Mr Crosby said.
It is unclear how the company, founded and owned by Robert Swan, got into financial trouble.
Mr Elkerton said it had been losing money on several contracts, was hit by a major computer glitch earlier this year, and had suffered a delay in receiving payments from customers. Early estimates are that the company owed $2.8 million to creditors and was owed $2.5 million.
"Rumours have been circulating over the company's financial health, especially over the past weeks. Debtors have certainly delayed their payment terms, which hit the profitability of the company," Mr Elkerton said.
The latest wave of job cuts follows Telstra's move this week to restructure the divisions that employ half of its 30,000 local staff, a move that is tipped to result in deep job cuts.
Given the job-shedding, Australians appear increasingly nervous about their employment prospects.
Figures from Westpac show consumers' unemployment expectations jumped 5.4 per cent this month, after a 1.3 per cent lift in April.
A senior economist at Westpac, Justin Smirk, said the rise suggested the unemployment rate could be rising towards 6 per cent, from 5.5 per cent today. Last week's budget also tipped a rise in the unemployment rate to 5.75 per cent.
"People are currently experiencing a softer labour market and they are expecting things to continue to deteriorate in the year ahead," Mr Smirk said.
"The fact that it's moving up suggests to us that we will see softer job numbers in full-time work in particular, and a further rise in the unemployment rate."
The sharpest fall in expectations was among managers and labourers, it said.
The run of bad news on jobs came as doubts swirled around the future of a small business owed by Aurizon that specialises in shifting container freight and employs several hundred across the country.
The rail freight operator formerly known as QR National is expected to review the future of its intermodal business next financial year, and analysts believe it will eventually be closed. The intermodal business has struggled to turn a profit since it was established in 2007.
with Peter Ker and Matt O'Sullivan
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