2020 February Job Cuts Report: Cuts Fall to 56,660, Tech Cuts Surge YOY
Job cuts announced by U.S.-based employers fell 16.4% from January’s total of 67,735 to 56,660 in February. Despite widespread concern, COVID-19 has not yet caused companies to cut positions, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Last month’s total is 26.3% lower than the 76,835 cuts announced in the same month last year. Through February, employers announced 124,395 job cuts, down 4.2% from the 129,823 cuts announced in the first two months of 2019.
Technology leads all industries in announced job cuts with 24,087, 10,218 of which were announced in February. That is 1,041% higher than the 2,111 cuts announced in that sector through February last year.
“The Tech sector is undergoing immense change, as large companies make cuts to become more efficient. Meanwhile, recent start-ups are folding or pivoting to more lucrative avenues or cutting back in order to comply with government regulations,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
Retail announced the second-highest number of cuts with 8,096, bringing the two-month total to 18,540. This is 55% lower than the 41,201 cuts announced through the same period last year. Bankruptcy claimed 667 jobs in this sector last month, while store closings claimed 6,260.
Companies in the Transportation sector have announced the third-highest number of cuts this year with 10,056, 6,703 of which occurred in February. Challenger tracked 4,768 cuts due to losses of contracts, with 2,694 specifically due to a loss of contract with Amazon.
The Media announced 1,584 cuts in February, the highest monthly total since 3,365 cuts were announced in March 2019. Of those, 386 were in the news media.
Restructuring claimed 40,581 jobs, while unit and store closings claimed another 38,175 so far this year. Lost contracts accounted for 7,179 cuts this year, while Bankruptcy was cited for 4,979 cuts.
“Despite widespread concerns about COVID-19, it has yet to impact job cut announcements. This may change if the supply side remains dormant, as companies grapple with whether to keep operations open without product. It could also impact Retail, Hospitality, and Travel companies, if concerns keep people at home,” said Challenger.
“Companies are already deciding which paths they need to take to keep the virus from spreading within their own offices. This includes limiting business-related travel and telling workers to stay home, not only when they are sick, but also, when technology allows, to do their jobs,” he added.
“We do not yet know how far-reaching the virus is in the United States. While the majority of cases worldwide have been mild and many people who contract it may not even require a hospital stay, that is not the case for high-risk populations, and limiting the spread of the virus is in everyone’s best interest,” said Challenger.
— ChallengerGray (@ChallengerGray) March 5, 2020