2016 November Job Cut Report: 23,936 Job Cuts Lowest Level of the Year
The pace of downsizing fell to the lowest level of the year in November, as U.S.-based employers announced plans to shed 26,936 workers from payrolls during the month, according to the report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
November job cuts were 12 percent lower than the 30,740 cuts announced in October. They were down 13 percent from last November, when job cuts totaled 30,953.
Last month’s total was the lowest of the year, falling below the previous low of 30,157, recorded in May. It was slightly higher than last December’s 23,622 job cuts, which was the lowest monthly total since June, 2000, when employers announced just 17,241 planned layoffs.
To date, employers have announced 493,288 job cuts in 2016. That is 5.5 percent fewer than the 521,847 job cuts recorded by this point in 2015.
“Barring an unlikely December surge in downsizing, the year-end job cut total should remain well below the 598,510 layoffs announced last year. Even if the new administration creates some uncertainty among corporate forecasters, most employers are in a strong enough position and to take a wait-and-see approach when planning for next year,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
The retail sector saw the heaviest job cutting in November, with 4,850 announced layoffs. Most of these resulted from the bankruptcy of American Apparel, which could impact nearly 3,500 workers.
The retail losses are more than offset by the surge in holiday hiring. In September, Challenger tracked retail hiring announcements totaling 317,000.
“These represent just a small fraction of the jobs being created, since most retailers, including the thousands of small, independent stores across the country, do not formally announce hiring intentions,” said Challenger.
Overall, retail job cuts are down 12 percent from a year ago. Through November, these employers have announced plans to shed 57,969 workers, compared to 65,609 job cuts recorded during the same period in 2015.
Even with the decline, year-to-date retail job cuts rank third among all industries, behind computer and energy. Computer firms have announced 66,188 job cuts in 2016, including 1,677 in November. The 2016 total is up 7 percent from 61,516 a year ago.
Meanwhile, heavy job cutting in the energy sector has ebbed in recent months, but the industry still leads all others with 105,041 job cuts, to date. That is 13 percent more than the 92,727 energy-sector job cuts recorded between January and November 2015.
“Despite a few notable exceptions, including energy and computer, most industries have seen job cuts decline in 2016. The pace of downsizing has continued to slow throughout the year, with the monthly average falling from 52,292 in the first six months of 2016 to 35,907 in the five-month period ending in November,” said Challenger.
“The second-half slowdown is likely to continue in December. In the past, the holiday season offered no protection against year-end surges in job cuts. In fact, prior to the Great Recession, the December job-cut average was consistently higher than the 12-month average. That has not been the case in the five years since the end of the downturn,” said Challenger.
Indeed, from 1993 through 2007, December job cuts averaged 76,990, compared to an overall monthly average of 71,275 during the same period. In five years since the end of the recession in 2009, December job cuts averaged 32,205, markedly lower than a monthly average of 45,141.
“One might attribute this to the recovery. However, even during the boom years of the late 1990s, December job cuts were higher than the monthly average. It is impossible to pinpoint the complex set of reasons for the recent decline in year-end job cuts, but it may not be a coincidence that it corresponds with the rise of social media.
“Job cuts around the holidays always presented a public relations risk, but most news stories remained fairly neutral. That is not the case with social media, where the sharing of news is often paired with biting commentary that can have serious consequences on an employer’s image and brand reputation,” said Challenger.