U.S. employers announced a record number of job cuts in April. The monthly total was 170% higher than the previous record of 248,475 cuts announced in January 2002.
The outplacement firm of Challenger, Gray & Christmas on Thursday released its job-cuts report for April, showing that 671,129 planned U.S. job cuts were announced in the month, a surge of 202% from the 222,288 cuts announced in March. Compared with cuts announced in April 2019, this year’s total is 1,577% higher than the 40,024 announced job cuts.
A total of 633,082 job cuts were attributed to the coronavirus outbreak and the forced shutdowns of nonessential businesses. Industry sectors hit hardest in April were entertainment/leisure (318,319 announced cuts), retail (84,502) and services (32,394).
For the first four months of the year, announced job cuts of 1.02 million are 342% higher than cuts for the same period in 2019. Employers announced 592,566 job cuts in all of 2019, a year-over-year increase of 10%. Announced cuts for the year to date are equal to 71.8% of job cuts made in all of 2019.
Andrew Challenger, vice president of the outplacement firm, said, “No doubt employers have every intention of bringing back workers once the immediate crisis passes, but the indefinite nature of this pandemic coupled with the fact that we’re seeing recession- or even depression-level economic data means the vast majority of these jobs will not return any time soon.”
Challenger added, “The longer people are out of work, the less money they have to spend. The longer people feel unsafe going out and spending, the less likely many small and midsize businesses will keep people on the payroll.”
U.S. firms in April announced plans to hire 285,639 workers, virtually all as a response to the coronavirus pandemic. All told, 280,200 of April’s new hiring announcements (98.1%) were related to the COVID-19 outbreak. The transportation sector announced plans to hire 251,200 new employees and the retail sector plans to hire 30,100. In March, employers announced plans to hire more than 800,000 new workers.
New York-based employers announced the most job cuts in April, with 84,738 planned cuts. Florida (71,138), Texas (70,318), Minnesota (57,192) and California (55,077) round out the five states losing the most jobs in April.
On Wednesday, ADP reported that April payrolls fell by an unprecedented 20,236,000. The U.S. Bureau of Labor Statistics is expected to report Friday that 21.25 million jobs were lost in April and that the U.S. unemployment rate will reach 16%.
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