which way now, page-30

I have a hard and fast rule not to cut and paste stuff here but this I thought was worth making an exception to that rule ;)

WSJ(1/22) Heard On The Street: Resources Layoffs Bode Ill
22/01/2009 10:24AM
(From THE WALL STREET JOURNAL)

By Liam Denning

Along with the government, one of the few sectors seemingly immune to layoffs has been the resources business. Indeed, a shortage of skilled workers, pushing up wages and lengthening development schedules, was cited as a key reason for soaring commodities prices.

So why the recent flurry of pink slips? Wednesday, BHP Billiton said it will cut 6% of its work force. Oil major ConocoPhillips and oil-field-services giant Schlumberger also announced staff reductions this month.

With crude oil and industrial metals prices having collapsed, some trimming is to be expected, especially following the hiring spree of recent years. Moreover, as in BHP's case, many of the workers being let go are contractors, with lower associated hiring and firing costs.

Even if cutting some workers makes sense in a crunch, however, this is worrying, and not merely for the sector's employees. Until recently, investors in mining and energy were fed a diet of Malthusian predictions about peak oil, equipment shortages and a dearth of engineering graduates.

Instead, the cycle lives on. Consensus forecasts still point to a bounce back in the price of commodities such as oil and aluminum as early as this year. But if the pace of layoffs picks up, the unavoidable conclusion would be that the producers themselves don't share such optimism.