January job cuts triple from 2008
Job cuts announced by U.S. employers more than tripled in January from a year ago, led by planned cutbacks at retailers after the worst holiday shopping season in four decades.
Job cuts announced by U.S. employers more than tripled in January from a year ago, led by planned cutbacks at retailers after the worst holiday shopping season in four decades.
Firing announcements rose 222 percent last month from January 2008, to 241,749, Challenger, Gray & Christmas Inc., a Chicago job-placement company, said yesterday. It was the largest monthly total since January 2002, when job cuts reached a record of 248,475, Challenger said.
A separate report yesterday said companies in the United States cut an estimated 522,000 jobs in January as the economy weakened at the start of the year. This survey, by ADP Employer Services, is based on payroll data from 400,000 businesses with 24 million combined employees. The Challenger Gray report is based on layoffs that companies announce publicly.
The drop in the ADP gauge was less than the 535,000 economists forecast and followed a revised cut of 659,000 for the prior month.
Employers are slashing workers as clogged credit markets and slumps in housing, manufacturing and other industries threaten to extend the longest recession in a quarter of a century. Persistent job losses will probably further curb consumer spending, which represents about 70 percent of the economy.
President Barack Obama is pressing Congress to pass an $819 billion stimulus bill to save or create up to four million jobs and steer the economy toward a recovery.
"We're in for several more months of bleeding on the jobs front," Joel Prakken, chairman of Macroeconomic Advisers L.L.C., of St. Louis, said in a conference call with reporters yesterday.
The number of planned job cuts in the Challenger Gray report increased 45 percent last month from December's 166,348. The figures are not adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of monthly numbers.
Retailers, battered by the worst holiday sales season in four decades, led the cutbacks, with 53,968 announced firings, a record for the industry.
Last month's job cuts included 7,000 at Home Depot Inc., the world's largest home-improvement chain, which also said it would abandon its design showroom business because of a drop in consumer spending.
Many announced job cuts eventually are carried out through attrition or early retirement rather than by actual layoffs. Also, some employees whose jobs are eliminated find work elsewhere in their companies, and some announced staff reductions never take place because business improves.
The Worst Months
Months with the largest number of layoffs announced by U.S. companies.
Month Layoffs
Jan. 2002 248,475
Sept. 2001 248,332
Oct . 2001 242,192
Jan. 2009 241,749
July 2001 205,975
Industry sectors with the largest announced cuts in January.
Industry Layoffs
Retail 53,968
Industrial goods 32,083
Computer 22,330
Pharmaceutical 22,063
Aerospace/
defense 17,800
SOURCE: Challenger, Gray & Christmas Inc.