January Job Cuts Surge to Decade High
The outplacement firm of Challenger, Gray & Christmas on Thursday reported that announced job losses in January rose by more than 17% compared to cuts announced in January 2020. Last month’s total of 79,552 is the highest January level since more than 240,000 job cuts were announced in 2009.
Month over month, job cuts rose by 3.3% from the 77,030 reported in December. More than 2.3 million job cuts were announced in 2020, almost three times the 592,556 jobs lost in 2019.
Andrew Challenger, vice president at the outplacement firm, noted that even though cuts were higher than average last month, the numbers are “leveling off.” He added, “Companies may be reassessing their staffing levels and waiting on the impact of the relief bill before making any additional workforce decisions.”
Nearly half of the job cuts announced in 2020 were directly attributed to the COVID-19 pandemic, while 4,620 of January’s announced cuts (5.8%) were attributed to the pandemic.
Industry sectors hit hardest in December were aerospace and defense (29,100 announced cuts), telecommunications (19,002 cuts) and warehousing (6,601 cuts). The entertainment/leisure sector lost 6,399 jobs in January, a year-over-year increase of 172%.
On the other side of the ledger, U.S. firms announced plans last year to hire 72,063 workers in January. In all of 2020, employers reported plans to hire 3.19 million workers, with nearly 800,000 of those jobs representing seasonal jobs.
Washington-based employers announced the most job cuts in January, with 29,277 planned cuts. Texas (20,779 cuts), Pennsylvania (11,116), California (9,212) and Tennessee (6,482) round out the five states losing the most jobs last month. Washington is home to Boeing, which has announced thousands of layoffs over the past year.
Wednesday morning, ADP reported that private sector payrolls decreased month over month in January by 78,000, well short of the consensus expectation for a gain of around 50,000. The weekly report on new claims for unemployment benefits reported earlier Thursday morning that 812,000 claims were filed in the week ending January 30. The monthly employment situation is due Friday morning, and analysts expect nonfarm payrolls to rise by 50,000 and the unemployment rate for January to remain unchanged at 6.7%.
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