The outplacement firm of Challenger, Gray & Christmas on Wednesday reported that as of April 12, U.S.-based companies have announced plans to cut nearly 247,000 jobs for the month, an increase of 11% from the 222,288 job cuts announced at the end of March, with more than two weeks left in April. The announced cuts for the month are virtually certain to surpass the record number of job cuts reported in January 2002, when U.S. employers chopped 248,471 jobs.
Of the 247,000 cuts announced so far in April, 244,073 are due specifically to the COVID-19 outbreak, an increase of 72% from 141,844 pandemic-related job cuts announced through the first three months of the year. As of April 12, 385,917 jobs have been lost as a result of COVID-19.
Andrew Challenger, senior vice president of the outplacement firm, said, “With millions out of work due to state orders to shut down non-essential businesses, in addition to supply shock the virus created in trade, companies are making the hard decision to cut staff.”
Employers announced plans to cut 2,512,023 jobs between January 2008 and December 2009, the first two years of the Great Recession. During the dot-com recession of January 2001 to December 2002, employers announced plans to cut 3,423,699 jobs, according to Challenger, Gray.
“Employers are beginning to assess how and when they will bring their workers back to work. A new Challenger survey suggests many companies will not reopen until health experts agree it is safe to do so. Many are taking the lead of their state governments,” Challenger added.
Challenger, Gray’s survey also indicated that more than 47% of employers will follow the lead of their state’s government to decide when to reopen. Another 14% reported that they will follow federal government advice and 13% said they would listen to what health experts say before reopening.
The survey also asked employers how long they plan to maintain their plans for fighting the pandemic. Well over half (61%) said they would continue until health authorities say it is safe to bring workers back to their plants and offices. Nearly a quarter (24%) plan to maintain their precaution for another one to three months and 8% are planning for a three to six month period before normalcy begins to return.
Later Thursday morning, the U.S. Bureau of Labor Statistics is expected to report that new claims for unemployment benefits rose to 3.35 million last week. In the previous week, new claims rose by 3.28 million, more than five times the prior all-time high.
As of Thursday morning, Johns Hopkins University’s School of Medicine is reporting nearly 640,000 confirmed cases of COVID-19 in the United States and nearly 31,000 deaths.
Later this morning, the weekly report on new claims for unemployment benefits is expected to show that 6 million new claims were filed last week. Over the past three weeks, 17 million Americans have filed for benefits.
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