2013 November Job Cut Report: Over 45K Job Cuts; Retail, Aerospace/Defense Lead
Job cuts were virtually unchanged in November, as U.S.-based employers announced plans to shed 45,314 workers from their payrolls. That marks a decline of just 0.9 percent from the 45,730 planned job cuts announced in October, according to the latest report on monthly job cuts released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
November job cuts were 21 percent lower than the same month a year ago, when planned layoffs totaled 57,081; the second highest monthly total in 2012. This marks the second consecutive month that job cuts came in below the year-ago figure. The October total was 4.2 percent lower than October 2012.
To date, employers have announced 478,428 job cuts in 2013, which is 2.5 percent fewer than the 490,806 cuts announced through eleven months of 2012. If employers announce more than 44,934 planned layoffs in December, the 12-month total will surpass the 2012 year-end total of 523,362.
There is a strong possibility that 2013 job cuts will exceed last year’s total, considering that job cuts, while averaging 43,493 per month year-to-date, have averaged 45,449 over the last four months. However, December has experienced relatively low job-cut totals since the end of the recession, averaging 37,860 since 2009.
The retail industry saw the heaviest job cutting in November, with 9,998 announced layoffs during the month. While the spike in retail cuts heading into the holiday sales season might be cause for alarm, the majority of the planned cuts were related to the closure of remaining Blockbuster video rental stores, as well as the sell-off and closure of a grocery store chain in Chicago.
“Safeway Inc. plans to close all of its Dominick’s grocery stores in the Chicagoland area, shedding 5,633 workers from its payroll. However, there is a good chance that many of these workers will be re-hired by the several grocery-store operators that have agreed to purchase and take over many of the Dominick’s locations. The key to successfully retaining their positions is to fully embrace the new owner’s way of doing business. There can be no, ‘This-is-the-way-we’ve-always-done-it’ mentality,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Meanwhile, the potential for job cuts at the nation’s aerospace and defense firms has been on the rise since federal budget cuts and sequestration measures were enacted to rein in budget deficits. In November, the sector announced 4,174 job cuts, the third largest sector-total for the month. The majority of the cuts were the result of job cuts planned by Lockheed Martin, where plant closures are expected to result in 4,000 job losses. The cuts were attributed directly to federal spending cutbacks. It was the largest job-cut of the year attributed to federal spending cuts or sequestration.
To date, aerospace and defense firms have announced 33,850 job cuts and are on pace to turn in the heaviest 12-month job-cut total since 2009, when planned layoffs reached 52,271. The year-to-date total for the sector ranks fifth among all industries for the year.
The financial sector has seen the largest number of job cuts through November, with employers announcing 59,189 layoffs so far this year, including 1,598 in November. The year-to-date total is up 99.6 percent from a year ago, when these employers announced 29,653 job cuts from January through November.
“Many of the recent cuts have been concentrated in the mortgage lending business, as banks shed many of the extra workers added to handle the flood of foreclosures and loan refinancing in the wake of the recession. Recent increases in lending rates and home prices are also lowering demand for new mortgages, thus further reducing the need for additional workers,” noted Challenger.