2018 November Job Cut Report: Cuts Hit 53,073, YTD Up 28 Percent
Companies around the globe are beginning to announce large-scale layoff plans, possibly signaling an upcoming downturn. The number of planned layoffs announced by U.S.-based employers totaled 53,073 in November, according to a report released Thursday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.
In November, Japanese tech and energy conglomerate Toshiba announced plans to cut roughly 7,000 workers, while German pharmaceutical giant Bayer announced 12,000 cuts following its merger with Monsanto. It remains to be seen how these announcements will impact the U.S. workforce. Challenger tracks job cut announcements by U.S.-based companies or those that occur in the U.S., as specified by the company.
The big story in the U.S. last month, however, was the announcement by General Motors that it would cut 15 percent of its workforce, or up to 14,000 employees, after offering 18,000 buyouts to workers in an effort to save over $6 billion. Challenger counted 14,000 cuts due to cost-cutting. GM’s announcement is the 7th largest single job cut announcement by an Automotive company since 2001, according to Challenger’s tracking.
“Announcements like GM’s will not be the last, as companies adapt to shifting consumer behavior. We’ve already seen major plans in the U.S. from Verizon, Wells Fargo, and Toys“R”Us for exactly those reasons,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
Last month’s job cut total is 29.8 percent lower than the 75,644 cuts announced in October and 51.5 percent higher than the 35,038 cuts announced in the same month last year. So far this year, employers have announced 494,775 cuts, 28 percent higher than the 386,347 announced through this point last year. This is the highest 11-month total since 2015, when 574,888 cuts were tracked through November.
“Monthly job cut announcements averaged under 35,000 in all of 2017 and just under 44,000 in 2016. In 2018, cuts are averaging nearly 45,000 per month, with the last four months averaging over 55,000. This upward trend is indicative of a potential economic shift and could spell a downturn,” said Challenger.
“The job market remains strong for the moment, however. The tight labor market and high demand for skilled workers mean most of those who find themselves unemployed have a good chance of finding new positions,” he added.
Retail continues to lead all sectors in job cut announcements with 96,504. Telecommunications companies follow with 59,518, while Financial firms have announced 41,351 cuts this year. Health Care and Health Care Products manufacturers announced 39,443 cuts through November. Companies in the Consumer Products sector have announced 30,733.
Companies in the Automotive sector have announced 28,529 cuts in 2018, 64 percent more than the 17,392 announced through November last year.
Companies claimed restructuring was the cause of 177,441 job cuts this year, while 136,605 were due to plant, unit, and/or store closures. Another 35,456 were due to bankruptcy proceedings. Last month, 93 cuts were attributed to tariffs, specifically tariffs on Chinese-imported paper, bringing the year-to-date total to 798.
Meanwhile, Challenger has tracked 1,002,449 hiring announcements this year, 714,000 of which are seasonal. Employers announced plans to hire 15,422 workers in November.