Job cuts jump 30 percent year over year
December 7, 2017
• But 2017 still has lowest total in 20 years
• “Major M&A activity … could lead to a spate of large-scale job-cut announcements”
U.S.-based employers announced 35,038 job cuts in November, up 30 percent from the same month last year, when 26,936 job cuts were announced, according to a new report Thursday from outplacement company Challenger, Gray !& Christmas Inc.
Employers last month announced 17 percent more cuts than in October 2017, when 29,831 cuts were announced, according to Challenger.
So far this year, 386,347 job cuts have been announced, 22 percent fewer than the 493,288 cuts announced through November 2016. This is the highest monthly total since April, when 36,602 cuts were announced. November caps the lowest year-to-date total since 376,057 cuts were announced through November 1997.
“While job-cut announcements have remained low all year, major M&A activity, such as the CVS/Aetna deal and the possibility of Amazon buying generic pharmaceutical manufacturers, could lead to a spate of large-scale job-cut announcements to open 2018, especially at pharmaceutical, retail, and health care companies,” says John Challenger, chief executive officer of Challenger, Gray & Christmas.
Companies in the pharmaceutical sector have announced 13,254 job cuts so far this year, 48 percent more than the 8,981 cuts announced in the same period last year.
Retail continues to lead all industries in job cuts, with 74,665 cuts announced through November, a 28.8 percent increase from 2016, when the number of cuts reported through the same month was 57,969.
The health care sector announced 7,011 job cuts in November, bringing the year-to-date total to 38,145, a 123.9 percent increase from the 17,030 cuts announced through November 2016.
The services sector has announced the third highest number of cuts behind retail and health care this year, with 32,836, 3,920 of which occurred in November. That is 243 percent more cuts than the 9,584 announced in the same period last year.
Industrial manufacturing has announced 19,986 cuts in 2017, 37 percent fewer than the 31,656 cuts announced through November last year. Consumer products companies announced 59.2 percent more job cuts since last year, with a total of 15,985 payroll cuts announced this year, compared to 10,035 recorded through November last year.
Meanwhile, holiday hiring announcements are slightly behind last year’s totals. Companies have announced 608,129 seasonal hires so far this year, 2 percent fewer than the 620,700 announced last year, according to Challenger tracking.
However, total hiring announcements reached 1,092,436, the highest number on record.
“Employers have reported a lack of skilled workers to fill demand in many industries. In this tight labor market, those with the requisite skills and training have a leg up over the competition,” says Mr. Challenger.
“Opportunities exist for job seekers. It remains to be seen whether the recent tax reform bill will have a significant impact on job growth or announced cuts. It may make it easier for companies to combine, which generally leads to eliminating redundancies,” he says.