Tens of thousands of job cuts announced by blue-chip companies in a 24-hour period are a warning sign for the world’s recovery and emerge just ahead of two key reports forecast to show limited progress in the U.S. labor market.

In one of the biggest layoff announcements since the pandemic caused widespread economic shutdowns, Walt Disney Co. said late Tuesday that it’s slashing 28,000 workers in its slumping U.S. resort business. In the hours that followed, the pace of job cuts at some of the world’s biggest companies -- across in a range of industries from energy to finance -- quickened.

On Wednesday, Allstate Corp., the fourth-largest car insurer in the U.S., said it will cut 3,800 jobs, roughly 8% of its workforce. And Bloomberg reported that Goldman Sachs Group Inc. plans to cut roughly 400 jobs after temporarily suspending job reductions at the beginning of the crisis.

Announcements like these point to further challenges in a rebound that’s already slowed after an initial bounce back in May and June. Weekly figures due Thursday are estimated to show filings for U.S. unemployment benefits remain far above pre-virus levels, while Friday’s jobs report -- the last before the November presidential election -- is expected to reveal that employers added a half-million fewer workers in September than in August.

“Job losses were at first concentrated in service-sector jobs, but in any economic downturn you’re bound to get some more pruning as corporations are trying to protect profit margins,” said Brett Ryan, senior U.S. economist at Deutsche Bank Securities Inc. “You’ll see larger companies that may have been on a certain revenue trajectory before the downturn start to reevaluate.”

The fallout isn’t contained to American firms. Royal Dutch Shell Plc announced it will cut as many as 9,000 jobs as crude’s crash forces billions of dollars in cost savings, while German auto-parts supplier Continental AG’s supervisory board approved a restructuring plan that will cut or shift 30,000 jobs worldwide.

Office Workers
The latest layoffs stretch beyond hourly workers, who were among the hardest hit at the start of the pandemic in industries such as restaurants and hospitality, to office and managerial positions.

While Shell didn’t provide a full breakdown of the cuts, a spokesperson said that positions in the top three layers of the company would be reduced by one-fifth.

“In many places, we have too many layers in the company: too many levels between me, as the CEO, and the operators and technicians at our locations,” said the oil major’s chief, Ben van Beurden.

The rout in the oil sector has been so swift and severe that once-sacrosanct corporate positions are being trimmed. Exxon Mobil Corp., which long prided itself on weathering crude-market crashes without resorting to job cuts, shocked investors and analysts in recent months when it targeted as much as 10% of U.S. office staff for layoffs.

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