New figures released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc. show employers announced the fewest first-quarter job cuts in 19 years, providing further evidence that the economy continues to gain strength as it enters the sixth year of recovery.
The first quarter closed with 34,399 March job cuts, the second lowest monthly total since January 2013. The only month to see fewer cuts during that period was December, when just 30,623 job cuts were announced. The March total was 18 percent lower than the 41,835 planned job cuts reported in February and 30 percent lower than a year ago when March job cuts totaled 49,255.
Through the first quarter of 2014, employers announced 121,341 job cuts, down 16 percent from the 145,041 cuts tracked during the first three months of 2013. The first-quarter total was virtually unchanged from the previous quarter, when 121,667 job cuts were recorded.
The first quarter total was the lowest quarterly total since Q2 of 2013 (113,891). Even more significant, however, is the fact that it is the lowest Q1 total since 1995, when 97,716 job cuts were announced.
“The first quarter typically experiences some of the heaviest job cutting of the year. Since we began tracking planned layoffs in 1989, the first quarter is only slightly lower than the fourth quarter when it comes to the pace of downsizing, with an average job-cut total of just over 205,000. Employers are well below that pace this year, suggesting that layoffs continue to decline in a recovery that is approaching its five-year anniversary,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
First quarter job cuts were led by the retail sector, where employers announced 18,231 job cuts through the first three months of 2014, including 2,989 in March. The financial sector follows closely with 15,306 job cuts announced over the first three months of 2014.
Neither retail nor financial firms saw the heaviest job cuts last month, however. The top job-cutting sector in March was health care, which announced plans to reduce payrolls by 5,768, bringing its year-to-date total to 10,984, which ranks fourth among all industries.
“We continue to see downsizing in the health care sector, as hospitals adjust to lower Medicare reimbursements and cutbacks in Medicaid funding. There has also been a surge in job cuts among the workers hired to sign-up Americans for health insurance under the Affordable Care Act. With the sign-up period ending on March 31, call centers around the country have been purging their payrolls of these temporary employees,” noted Challenger.
“Call center workers are also being impacted by a series of layoffs announced by wireless carrier Sprint. While Sprint is struggling to keep up with AT&T and Verizon, at least some of the recent cuts appear to be the result of smarter consumers. A company spokesperson told one news outlet that many of the call center reductions reflect customers’ growing familiarity with smartphones as well as simplified rate plans which have resulted in fewer customer service calls,” said Challenger.
Job cuts within the telecommunications industry have risen sharply this year. The 11,277 job cuts announced by these firms, to date, ranks third among all industries and marks a 225 percent increase from the 3,471 telecommunications job cuts recorded in the first three months of 2013.Download Resource