The outplacement firm of Challenger, Gray & Christmas on Thursday released its job-cuts report for August showing that a total of 38,472 jobs were cut last month, an increase of 41.8% month over month and the third-highest total of the year to date. More than 60,000 job cuts were made in March, the highest monthly total since April 2016. Last month’s firings were 13.7% higher than in August 2017.
Job losses are highest in the industrial goods manufacturing sector, where 10,188 cuts were announced. Challenger, Gray noted that half of the 18,464 announced manufacturing job cuts so far this year are down to Johnson Controls, which revealed plans to cut 9,200 by 2020 while hiring 900 new salespeople.
The second-highest level of announced job cuts came in the consumer products manufacturing sector, where companies said they have plans to ax 4,716 workers. For the year to date, this sector has lost 26,926 jobs, an increase of 184.5% compared with the first eight months of 2017.
For the first eight months of the year, employers have slashed 310,773 jobs, compared to a total of 289,132 in the first eight months of last year, an increase of 7.5%.
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John Challenger, the outplacement firm’s CEO, said:
August job cut announcements seem to indicate the summer lull is over. Companies are assessing global market conditions and adjusting staffing levels accordingly. … Manufacturers are grappling with rising costs, weak demand, and competition on a global scale. We may see additional job cuts as the full ramifications of imposed tariffs are felt.
Challenger, Gray also noted an increase last month in the number of companies blaming the job cuts on the Trump tariffs on imported steel and, for a time, newsprint. The research firm said 521 U.S. workers lost their jobs in August because of the tariffs.
New hiring announcements totaled 17,274 in August, the highest total since February. Regarding tech jobs, John Challenger added:
Tech companies announced plans to hire over 7,000 workers in August. Demand for people with coding, web and software development, and network security skills and experience are in high demand right now.
The sector with the third-highest total of job cuts in August was retail with announced losses of 3,715. For the year to date, the retail sector has lost 79,478 jobs to lead all sectors in firings.
In the first eight months of 2018, companies have announced plans to hire 260,672 workers, compared to a total of 571,023 new hires for the same period last year. For all of 2017 plans were announced to hire just over 1.1 million employees.
For the year to date, California (48,979), New Jersey (38,839) and Texas (23,435) have lost the most jobs.
The top three reasons given for the 2018 job cuts are restructuring (118,961), the business is closing (99,874) or bankruptcy (33,178). Corporate cost-cutting initiatives have cost 24,213 jobs so far this year.
On Friday the U.S. Department of Labor is expected to report that U.S. employers added 195,000 jobs in August, well above the July total of 157,000 new jobs. ADP’s employment report is due out later this morning, and economists expect job growth of 182,000 for August, down from 219,000 in July.
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