Flood of job cuts

Job cuts are nothing new with the economy being what it is. Just look at the 2.6 million jobs lost in 2008. But, this week started off with a real bruising. On Monday alone, a bunch of big companies announced job cuts totaling 71,400 - all in one day! If we go by company reports, more than 200,000 job cuts have been announced so far this year - and we're only approaching February!

Some big name companies are letting their workers go. Caterpillar, the construction machinery giant, said it will lay off 20,000 employees, citing a "very challenging global business environment." Drug­-maker Pfizer said it will cut 10 percent of its current workers, along with another 15 percent, once a pending merger with Wyeth goes through - for a grand total of 26,000. Sprint Nextel said it would cut 8,000 staffers by the end of March; Home Depot announced cuts of 7,000; and, high-tech glass company Corning said it's going to reduce its workforce by 3,500.

What's going on?

1) Jobs are being cut across the board.What do pharmaceuticals (Pfizer-Wyeth), manufacturing (Caterpillar) and communications (Sprint Nextel) have in common? Nothing, except for a particularly harsh recessionary environment. The one industry that's beating the odds is healthcare. If you're looking for work, try to apply your skill set to the healthcare industry.

2) The recession got worse. A survey of private-sector economists shows that 52 percent of their companies saw drops in profit margins in the fourth quarter, while 44 percent were forced to cut payrolls in the same period. As more company earning reports come out, expect more job cuts to be announced.

3) Employers are uncertain about where the economy is going. As bad as things are now, company executives and managers don't know if this economy has hit rock bottom. So, they will continue to cut costs as much as possible.

It's important to understand there is a very clear cycle going on here: consumers are spending less these days, so companies are making less money. That forces them to cut costs, resulting in job losses, which in turn cause consumers to spend less. And so the cycle continues. There are remedies in the works, like President Barack Obama's proposed stimulus package. He is hoping to create up to four million jobs by investing heavily in infrastructure projects.

But, a new Congressional Budget Office report warns that government funding might not pick up until 2011, because "lags in spending stem in part from the need to draft plans, solicit bids, enter into contracts, and conduct regulatory or environmental reviews," among other things. Unfortunately, that means we should expect another round of job cuts before things start to turn around.

Ali Velshi is CNN's Chief Business Correspondent.