Households nervous as jobs go en masse
As Ford said it would cut 1200 jobs as part of its move to stop making cars in Australia, the entire 2500-strong staff of cleaning company Swan Services also lost their jobs. Swan had employed about 500 cleaners in NSW and the same number in Victoria, according to union estimates.
Ford's move to stop making cars here from 2016 also puts thousands more positions at risk in the vehicle parts industry, which will lose one of its biggest customers.
A Westpac index showed households' expectations of job prospects had worsened significantly.
Administrators of Swan, which provided cleaning services to offices and shopping centres, laid off its entire staff of cleaners after they were appointed by directors on Wednesday. An administrator from Pitcher Partners, Anthony Elkerton, said the company had been unable to cover its wages bill, so it had been forced to eliminate all positions.
"We have terminated all employees and we are currently in the process of formally notifying them," Mr Elkerton said. "There are a number of sites where staff have been re-employed by other contractors."
National president of United Voice union 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 faced delays receiving payments from customers. Early estimates are 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.
This week, Telstra announced it was restructuring the divisions that employ half its 30,000 local staff, a move that is tipped to result in deep job cuts.
Australians appear increasingly nervous about their employment prospects. Figures from the Westpac index show consumers' unemployment expectations jumped 5.4 per cent this month, after a 1.3 per cent rise in April.
Westpac senior economist Justin Smirk said the rise in the index suggested the unemployment rate could be heading towards 6 per cent, up from 5.5 per cent.
The budget 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, he said.
Doubts are also swirling around the future of one of Aurizon's small businesses that specialises in shifting container freight, and employs several hundred people 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.
Four apprentices at BHP Billiton's Cannington mine in Queensland lost their jobs on Thursday, as the world's biggest miner continues to build up its cost-cutting regime.
It is believed the workers were employed through a contract training provider.
with Peter Ker and Matt O'Sullivan
Frequently Asked Questions about this Article…
Administrators appointed to Swan Services terminated the cleaning company's entire workforce — about 2,500 staff in total. Union estimates said Swan employed roughly 500 cleaners in New South Wales and 500 in Victoria. Administrators said some staff have since been re-employed by other contractors.
Pitcher Partners administrator Anthony Elkerton said Swan had been losing money on several contracts, suffered a major computer glitch earlier in the year, and faced delays getting payments from customers. Early estimates noted the company owed about $2.8 million to creditors, while it was owed roughly $2.5 million by others.
United Voice union warned Swan could owe cleaners hundreds of thousands of dollars in entitlements, including annual leave, sick leave, unpaid wages and superannuation. The union said it wants to ensure affected workers are protected; administrators will handle formal notifications and creditor processes.
Ford announced it would cut about 1,200 jobs as part of its plan to stop making cars in Australia from 2016. The article says this move also puts thousands more positions at risk in the vehicle parts industry, because those suppliers will lose one of their biggest customers.
The article mentions Telstra restructuring divisions that employ half of its roughly 30,000 local staff — a move tipped to result in significant job cuts. Aurizon (formerly QR National) is expected to review its intermodal container freight business next financial year, with analysts believing it may be closed. BHP Billiton also cut four apprentices at its Cannington mine as part of ongoing cost-cutting.
Westpac’s index showed consumers' unemployment expectations jumped 5.4% in the month covered (after a 1.3% rise in April). Westpac senior economist Justin Smirk said the rise suggests the unemployment rate could be heading toward about 6% from around 5.5%; the federal budget had tipped unemployment to rise to about 5.75%.
The combination of high-profile job losses and company restructures (Ford, Swan Services, Telstra, Aurizon reviews, BHP cuts) and the rise in Westpac’s unemployment expectations index point to a softer labour market. Economists cited in the article expect softer full‑time job numbers and a further rise in the unemployment rate in the year ahead.
Monitor corporate announcements about restructures, administrations and large-scale redundancies in sectors such as automotive, cleaning, telecoms, rail and mining. Watch consumer unemployment expectation indexes like Westpac’s and official job numbers (especially full‑time employment). Also pay attention to creditor and administrator reports when companies enter financial distress, since those reveal payment shortfalls and risks to workers and suppliers.
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