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US Companies Cut Jobs as Economy Weakens

New reports show U.S. companies are cutting jobs as employers try to cope with the slowing U.S. economy.

A private employment firm, ADP Employment Services, says U.S. companies cut 25,000 jobs in November - the biggest reduction in payrolls since 2001.

A separate research firm, Challenger, Gray and Christmas, says the financial sector and the automotive industry planned the most job cuts in November as worldwide consumer demand weakened. U.S. bank Citigroup announced the most cuts, saying it plans to reduce its payroll by 52,000 employees.

The labor cuts correspond with a contraction in the U.S. service industries, which include banks, hotels, airlines and restaurants. A trade group, The Institute for Supply Management, says its index of business activity for the U.S. services sector fell to its lowest point since records began in 1997.

Meanwhile, a report from the U.S. Labor Department shows worker productivity declined at a slower pace than expected, indicating U.S. companies may be able to stay profitable with fewer employees.

Some information for this report was provided by AP, Bloomberg and Reuters.