Fortune 500 Companies' Profits Soar, But They're Still Not Hiring

Fortune 500The times are booming for America's biggest businesses. This year's Fortune 500, the wealthiest publicly traded companies as ranked by Fortune magazine, earned $820 billion last year, just under 2011's record revenues. But soaring profits aren't translating into jobs.

"These companies are making a lot of money and they're starting to do things after being on the sidelines for the past couple years," Fortune's managing editor Leigh Gallgher told "CBS This Morning." "Now, of course the next question is when are they going to start to hire again."

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Walmart in the No. 1 spot: Walmart, which snagged the top spot, saw its sales rise 5.9 percent in 2012. Coming in at No. 2, Exxon Mobil reported the second-highest profits in U.S. history, beaten only by its own 2008 record. Chevron, at No. 3, enjoyed its second-ever highest revenue. Fannie Mae, which ranks 12th, posted record profits as the housing market healed, and even J.P. Morgan Chase & Co., which lost $6 billion in an embarrassing trading flub last year, took the 18th spot with a 12 percent increase in profits.

Yet the job market isn't seeing results nearly as stunning. The unemployment rate, as determined by the Bureau of Labor Statistics, hit a four-year low of 7.5 percent in April. But this downward push has been excruciatingly slow. Companies clearly aren't using all their extra cash to hire.

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Lingering anxiety over the economy: According to a survey last year (by financial information firm Sageworks) of bankers, accountants and other professionals who work with private companies, almost a third said they believed their clients were holding off on hiring because of uncertainly, Forbes reported, and another 22 percent said the recession had simply made them more averse to risk.

And companies learn to 'do more with less': But there may also be a tragic irony at work. The anemic economy of the past few years forced companies to become more efficient. Many adopted new technologies, contracted out more tasks, and upped their employees' workloads. As a result, a lot of companies might have discovered that they can get along just fine with fewer on the payroll. In that same survey, almost a quarter of respondents thought that their clients didn't need to hire so urgently because they'd learned to do more with less.


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