October Job Cuts Drop Below 100,000 for First Time Since February

The outplacement firm of Challenger, Gray & Christmas on Thursday reported that announced job losses last month represented the highest October total on record. For the year to date, more than 2.16 million job cuts have been announced, more than triple the 592,556 jobs lost in all of 2019.

U.S. employers announced 80,666 job cuts in October, a decline of 32% from September’s 118,804 job losses. The October total represents a year-over-year increase for the month of 60%.

Andrew Challenger, vice president of the outplacement firm, noted that the vast majority of job cuts in 2020 have been related to shutdown orders and consumer caution due to the COVID-19 pandemic. Now, however, “We’ve now seen tens of thousands of cuts in industries outside Entertainment and Retail, indicating the impact is spreading. … [A]s case counts rise and more jurisdictions impose stricter enforcement, and stimulus money dries up with no coming legislation, uncertainty is likely guiding many company decisions on retaining workers.”

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In October, COVID-19 was named as the cause of 7,803 job cuts, while another 25,281 were attributed to lack of demand and 16,529 were attributed to market conditions. For the first 10 months of 2020, the coronavirus pandemic is responsible for nearly 1.1 million job losses.

Industry sectors hit hardest in October were entertainment/leisure (14,804 announced job cuts), energy (11,787 cuts) and transportation (111,475 cuts). For the year to date, the entertainment/leisure sector has lost 845,954 jobs, a year-over-year increase of more than 6,800%.

So far this year, U.S. firms have announced plans to hire 2.93 million workers, including 255,198 hiring announcements announced in October. Nearly 700,000 of those jobs represent seasonal hiring plans for the coming holiday shopping season. Last year, companies hired nearly 814,000 seasonal workers.

California-based employers announced the most job cuts in October, with 17,950 planned cuts. Illinois with 9,801 planned cuts. Washington (7,989), New York (7,851) and Texas (6,444) round out the five states losing the most jobs last month.

Wednesday morning, ADP reported that private-sector payrolls increased month over month in October by 365,000, far short of expectations for a gain of 600,000. The weekly report on new claims for unemployment benefits released Thursday morning showed 751,000 claims for the week ending October 31, higher than the consensus estimate of 745,000 new claims filed. The monthly employment situation is due Friday morning and analysts expect nonfarm payrolls to rise by 600,000 and the unemployment rate for October to drop to 7.7%.

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