Let's take a company as an example: Bank of America. They just went on an acquisition binge buying troubled outfits Countrywide Financial and Merrill Lynch. BoA has been hoodwinked unfortunately cumulating with Thain’s decoration bill. Anyway, as a result, Bank of America is announcing layoffs.
If the layoffs were from consolidating operations then there you go. They're contributing to the rising unemployment rates, and while everyone was doing fine (ML, I think would have came out of their crisis ok, and Countrywide would have proportionally have less layoffs.) Without those mergers, we would kept work “duplicated” however STILL EFFICIENT since whatever work they do is still for the betterment of their respective corporations. Most respectable companies reduce staff out of attrition rather than outright laying them off.
Now, being taught economics, one thing always leads to another: corporation buys their weaker counterparts, lays people off due to duplication, then those unemployed would be collecting unemployment, further sapping companies out of money, then eventually those unemployed won't be able to buy shares, either outright or through their retirement plans, of any company simply because they cannot afford to. Corporation stock prices drops, lays more people off. Domino effect.
Remember when W. asked us to do the "patriotic thing" by spending money! Well, shouldn't corporations start spending money to keep employees retained?
What goes around comes around...