Research >> Economics

Challenger Layoffs announced 58,577 cuts in May


U.S.-based employers announced plans to cut 58,577 jobs from their payrolls in May, up 46% from the 40,023 cuts announced in April, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

May’s cuts are up 86% from the same month last year, when 31,517 cuts were announced. So far this year, employers have announced 289,010 job cuts, 39% higher than the 207,977 cuts announced in the same period last year.

“The Tech sector announced the highest number of job cuts last month. Large Tech firms are finding they need to move workers through the pipeline in order to become more agile. In fact, we’ve seen a number of Tech and Telecom companies offering buyouts to older workers over the last year,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.

Companies in the Technology sector announced 12,635 job cuts in May, bringing the year-to-date total to 18,568, 342% higher than the 4,205 announced through this point last year. Telecom companies announced the second-highest number of cuts in May with 6,751, 60% of the 11,202 total cuts announced for the year.

Tech companies, however, are not the biggest job cutters in 2019. Retailers continue to lead all sectors with 50,243 cuts, 2,167 of which were announced in May. Retail cuts are down 28% over last year, when 69,316 were announced.

“While job cuts in the Retail sector appear to have slowed, brick-and-mortar retailers continue to close stores and compete with the ease of online sellers. Since January 2017, we have tracked 18,242 announced store closures,” said Challenger.

“Industrial Manufacturing and Automotive companies are also announcing an increasing number of job cuts. This is significant, as these industries are likely to be most hurt by the potential trade war with Mexico, increasing costs, and lower consumer demand,” said Challenger.

So far this year, Industrial companies have announced 44,552 cuts, the second highest of the year and 671% higher than the 5,782 job cuts announced through May 2018.

Meanwhile, companies in the Automotive industry have cut 21,446 jobs, 211% higher than the 6,905 cuts in that sector in the first five months of 2018. It is the highest five-month total since 2009, when 111,614 cuts were announced through May. In fact, this year’s total for the sector has already surpassed year-end totals for every year since 2009, with the exception of last year, when 30,587 total cuts were announced, and 2012, when 24,092 Auto cuts were announced for the year.

[source: imgur.com]

“Automakers and suppliers, like big Tech companies, are streamlining their workforces to remain competitive. Last month’s announcement from Ford included the discussion that many of the cuts will reduce bureaucracy to make the company nimbler,” said Challenger.

In May, Ford announced they were completing 7,000 job cuts, or 10% of salaried staff, this summer. Challenger previously counted all but the 800 cuts occurring in the U.S. through August.

The Challenger Report found that employers based in the Eastern U.S. are announcing the highest number of job cuts, with 87,422. That is 33% higher than the 65,562 cuts announced in this region through May last year.

Meanwhile, companies in the Southern U.S. have announced nearly 85% more job cuts than last year: 65,706 job cuts announced this year, compared to 35,549 announced during the same period last year.





Posted: June 6, 2019 Thursday 07:30 AM




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