Jobs that Could Be in Trouble

The economy appears to be in trouble and everyone is wondering what industries will suffer the most from the up coming recession. When dollars get tight, people focus on cutting costs and buying necessities. So, anything that can be described as "waste" are most vulnerable. Currently, unemployment is now above 6 percent and some fear it could reach double digits.

The following are a few examples of industries that could be hardest hit:

• Supermarkets and fast food establishments could be the first to see a negative impact. The latter is for obvious reasons, because people will simply refrain from eating out as often. Supermarkets, on the other hand, will find themselves in a battle over pricing that we hadn't seen in years. The large volume leaders -- Walmart, Costco, and Sam's -- will be the likely winners of that battle. AOL Money & Finance points out that "Aside from Supervalu, which has already said it is struggling, Kroger and Safeway could be affected as well. These three largest chains have more than 750,000 workers. If same store sales drop sharply and a large number of outlets are closed watch for as many as 50,000 people being out of work.This does not take into account the scores of smaller chains and tens of thousands of individual food retailers around the country." On the fast food front, 10,000 jobs have already departed from Starbucks. That will only be the beginning.



• An industry that has been perceived as some what recession proof -- the Internet and E Commerce -- could be falling on hard times. The way these industries will be hit is if the damage is widespread throughout the business market place and it has a ripple effect on these areas. To some companies, E commerce and web businesses are an option, not a necessity. If that is the case, they too could suffer.



• E companies could find themselves in pain. My company's own web platform of over 90 websites has seen a slight decline in pay per click advertising revenue (fortunately we have seen a rise of other advertisiers). People are getting their ads for less because there are fewer competing to place them. What type of business are vulnerable? Google, Yahoo, eBay, and Amazon, just to name a few. Combined, these four employ over 75,000 employees. Yahoo seems the most vulnerable and could easily layoff 20 percent of its 15,000 employees.



• Software firms are also very vulnerable and I am sure that Bill Gates and his friends at Microsoft are among the most concerned. The largest of these companies employ over 600,000 combined. If these firms start laying off, it will have a trickle effect through out the entire economy since so many businesses are dependent on them.



• The hot industry in my neighborhood is energy and even it is vulnerable to cut backs. The price per barrel has dropped from a high of nearly $150 to around $70. Those prices are still high, historically, but the days of the fatted calf may be fading. Some are projecting a cut of as many as 5 percent of the labor force in these industries.



• Not surprisingly, media companies are taking a significant hit at this time. Everyone seems to be trying to lower expectations, including Viacom and CBS. The six largest media companies -- including Time Warner, Disney, and GE -- employ over 400,000 employees. If they start laying off the ripple effect could be huge.

What over shadows these dire concerns is the fact that thing Wall Street loves to see it that, when a business hits a hard time, the decision makers are tough and willing to make unpopular decisions. This is often best demonstrated in layoffs. In fact, the Stock Market has a history of rewarding companies with higher returns as they let employees go.

Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.

Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

2007 Forbes 400

The World's financial elite have become more elite over the last few years. It wasn't very long ago when you could get in the Forbes 400 with less than a billion dollars. Not anymore, the poorest guy on the list is worth $1.3 billion.

Here are a few other interesting facts:

* "The collective net worth of the nation's mightiest plutocrats rose $290 billion to $1.54 trillion."

* "Nearly half of the 45 new members made their fortunes in hedge funds and private equity. "

* "The biggest gainer this year was Kirk Kerkorian, who padded his fortune by $9 billion as shares of his MGM Mirage (nyse: MGM - news - people ) casino outfit rose 135% over the past year. "

* "The youngest member of the Forbes 400 this year is 33-year-old John Arnold, a former Enron trader who now runs hedge fund Centaurus Energy and has amassed a $1.5 billion fortune."

* Number 1 remains Bill Gates (who was temporarily displaced by Carlos Slim for a few months)

* "The oldest member of the list is potato king John Simplot, who is 98 years old and worth $3.6 billion."

* "Seven members of last year's list have died."

* Fifty people couldn't keep up and either lost a significant amount of wealth, couldn't keep up with the higher threshold, or were surpassed by others.

I always enjoy Forbes annual list because if gives cause for ponder and cause to always hope about next year. Enjoy Forbes's interesting slide show.

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Move Over Bill Gates

I read in the Wall Street Journal this week that:

Bill Gates has always said that he hates bearing the title of “world’s richest man” — and the accompanying burden. Now, he may finally get some relief.

According to this article by Geri Smith in Business Week and this AP story by Lisa Adams, the world’s richest man may now be Carlos Slim Helu (picture), the Mexican telecom tycoon. (Both articles build on the work of financial journalist Eduardo Garcia, founder and director of Sentido Comun, a Mexico-based financial-news Web site.)

Granted, determining people’s net worths is always just educated guesswork, so I wouldn’t say the finding is definitive. Yet the articles say that Slim, as he’s known, was worth $67.8 billion, or nearly 8% of Mexico’s entire GDP. In its latest global billionaires list, Forbes listed Bill Gates’s wealth at $56 billion.

It is at times such as this that I begin to feel very ethnocentric. Imagine, someone other than an US citizen, being the richest person in the world. It isn't the first time, but it strikes me as odd. To add further irony, Mr. Slim is Mexican. In a time when everyone seems to be leaving his country in order to find opportunity in the US, he has capitalized on opportunities that has made him the world's richest person.

Well, Gates can give a sigh of relief. The burden of being at the pinnacle of wealth has been transferred to another person. Being rich can be so challenging. My heart bleeds for both of them.