Outplacement firm Challenger, Gray & Christmas on Thursday released its job-cuts report for January, showing that a total of 67,735 planned U.S. job cuts were announced in the month, more than double the 32,483 cuts announced in December. Compared with cuts announced in January 2019, this year’s total is 27.8% higher and the highest monthly total since last February.
December’s cuts reduced the year-over-year total percentage increase from 13.1% in November to 10.0%. Employers announced 592,566 job cuts in 2019, an increase of 10% compared to 2018.
The sector announcing the most cuts last month was technology. The industry plans to chop 13,689 jobs, more than 1,800% higher than the 719 announced in December and more than 2,000% higher than the 638 announced in January 2018.
The tech sector lost about 350% more jobs last year, 64,166, compared to 14,230 jobs lost in 2018, and the government sector has announced cuts totaling 13,806, up nearly 190% year over year. In 2019, the hardest hit sector on a percentage basis was mining, where job cuts of 8,135 were nearly 1,300% higher than in 2018.
Andrew Challenger, vice president of the outplacement firm, said, “We have seen large Technology companies shed workers as they pivot to new products or services. In some cases, long-standing, bellwether companies are reducing bureaucracy and removing layers of management to become nimbler.”
Challenger continued: “Tech is not the only industry embarking on this kind of restructuring. Companies across all industries are reexamining their hierarchies, particularly in Automotive and Retail, where innovations in technology are changing the landscape.”
The retail sector announced cuts totaling 10,444, many the result of recent bankruptcy filings. According to Challenger, of the 3,852 jobs lost to bankruptcies in January, 2,631 were lost in the retail sector. Store closures accounted for another 6,924 job cuts in January. Retailers cut 48,733 jobs last year, the highest total in two decades.
The industrial goods (manufacturing) sector also got off to a poor start this year with 6,098 cuts announced in January. Manufacturers cut nearly 71,000 jobs in 2019.
Automakers announced 5,437 cuts in January, more than 10% of the 50,766 announced in 2019.
Ohio employers announced the most job cuts in January (11,357). Illinois (7,157), California (6,751), New York (4,811) and Kansas (3,398) round out the five states losing the most jobs last month.
The top three reasons given for January job cuts are restructuring (22,424 jobs), the business is closing (18,943) and voluntary severance/buyouts (3,900). Job cuts related to the production halt of Boeing’s 737 Max totaled 3,055 in January. Boeing was among 2019’s most hated companies.
Challenger also noted that announced hiring plans totaled just 23,229 in January, the smallest number since 2016 and less than a third of the 74,040 new jobs announced in January 2019.
On Friday, the U.S. Department of Labor is expected to report that U.S. employers added 158,000 jobs in January, an increase of 9% compared with 145,000 jobs added in December.
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