115,762 Job Cuts in August; Highest Number of Cuts Tracked in a Single Year on Record
Job cuts announced by U.S.-based employers in August totaled 115,762, 116% higher than the August 2019 total of 53,480, according to a monthly report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
August’s total is 56% lower than the 262,649 job cuts announced in July. It is the highest total in August since 2002, when 118,067 job cuts were announced. So far this year, employers have announced 1,963,458 cuts, 231% higher than the 592,556 cuts tracked in January-August of 2019. Announced job cuts in 2020 have surpassed the previous record annual total of 1,956,876 recorded in 2001.
“The leading sector for job cuts last month was Transportation, as airlines begin to make staffing decisions in the wake of decreased travel and uncertain federal intervention. An increasing number of companies that initially had temporary job cuts or furloughs are now making them permanent,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Transportation companies announced 26,545 cuts in August. Although this was 59% lower than the 65,093 cuts announced in July, it is 647% higher than the 3,554 cuts announced in August 2019. So far this year, the sector has cut 131,571 jobs, a 482% increase over the 22,593 cuts announced in January-August 2019.
Entertainment/Leisure companies, including bars, restaurants, hotels, and amusement parks, posted the second-highest number in August, with 17,271 job cuts, bringing the year-to-date total in that industry to 799,051, the highest of the 30 industries tracked by Challenger. That is 8,128% higher than the 9,711 cuts reported in January-August 2019. Retail companies posted the second-highest total of job cuts through August at 168,403, 194% higher than the 57,226 cuts through August 2019.
Market conditions caused 44,651 of the announced cuts in August, followed by 29,982 cuts due to demand downturn, and 22,532 cuts due to cost-cutting. COVID-19 is the reason cited for 1,083,394 cuts so far this year.
Companies announced 160,411 hiring plans in August. Entertainment/Leisure led with 45,575 hires, followed by Construction, which plans to add 31,052 jobs.
“The employment landscape is dealing with a host of burdens that reach beyond job cuts. COVID-19 and the recession continue to cause volatile conditions in many industries,” said Challenger.
“Both companies and workers are grappling with increasing uncertainty due to stalled economic relief, the approaching election, and child care and education concerns. This is undoubtedly impacting talent management concerns,” said Challenger.
“Many employees hesitate to return to the job force out of fear of exposure to COVID. Parents are trying to determine if they can safely send their children back to school or daycare, or if they need to facilitate remote learning. In some cases, working parents do not have a choice,” he added.
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— ChallengerGray (@ChallengerGray) September 3, 2020