More layoffs coming in suburbs, but at slower rate than last year

About half as many layoffs are scheduled by companies statewide in coming months compared to a year ago, indicating a slowdown in cutbacks and a rebounding economy.

About 650 layoffs — including about 290 by suburban-based companies such as Kmart and Campfire marshmallow maker Doumak — are expected now through April. Last year during the same period, 11 companies slated about 1,100 layoffs statewide that included 449 around area suburbs, according to documents for January posted Monday by the Illinois Department of Commerce and Economic Opportunity.

Layoffs are clearly abating and hiring is picking up, albeit unevenly, said Diane Swonk,

chief economist and senior managing partner at Mesirow Financial in Chicago.

“The tide is coming in, but failing to lift all boats,” Swonk said.

The latest round of layoffs includes 67 workers targeted at Itasca-based DeepDiscount.com, a distributor of DVDs and video games. The discount web business was acquired last November by Irvine, Calif.-based C.D. Listening Bar Inc. and the workers have the opportunity to transfer to a temp agency. They could work for the company when needed, said Andrew Moscrip, head of human resources.

“The warehouse work force fluctuates daily,” Moscrip said. He could not provide work force numbers now or before the acquisition.

Another company, marshmallow maker Doumak in Bensenville, notified the state of 60 workers affected by a temporary layoff. The company acquired the Campfire brand in 2003, according to its website. A spokeswoman was unavailable for comment.

Another 163 jobs cuts are the result of closing two Kmart stores in Franklin Park and Washington, Ill. Kmart is a division of Hoffman Estates-based Sears Holdings Corp., which is consolidating stores.

In Illinois, the unemployment rate was 10.1 percent in 2009 and declined to 9.3 percent by December 2010. In the Chicago-Naperville-Joliet area, the improvement was more pronounced with unemployment declining from 10 percent in 2009 to 8.6 percent by December.

Many of the challenges that remained unknowns a few months ago have become more clear. Federal taxes will not be raised, the effects of health care costs are becoming clearer and the administration in Washington appears to be taking a more pro-business direction, said Tom Rowen of Bartlett, director of Institutional Portfolio Management at Fifth Third Bank in Chicago.

“The one negative we face in Illinois is the impact of the state tax increase, though with some incentives for hiring that may not be much of a drag on hiring in 2011,” Rowen said.

Also at this time last year, the economy was growing at about the same rate as it is now, but there was much less certainty that the growth would continue, said Michael Miller, economics professor at DePaul University.

“There was much talk a year ago about the economy dropping back into recession, the dreaded double-dip recession, so firms did not have the confidence to hire, and some even were convinced that further reductions were in order given the bleak outlook,” Miller said.

The economy has continued to grow since the end of the recession in the summer of 2009 and now few firms fear a dip back into recession. Confidence would lead very few firms to reduce their work forces, said Miller.

“Note that the key word here is confidence,” Miller said. “The firms that are planning the layoffs are likely ones that are either in industries that are being left behind by this economic expansion, or ones that may be very near failing regardless of the economic growth. Even in the best of economic times there are firms that must cut back and workers that will lose their jobs through no fault of their own.”