- Fewest monthly job cuts in more than 15 years
- Lowest December total on record
- Q4 total lowest quarterly total since Q3 2012
A strong economy, coupled with what appears to be a growing reluctance to announce layoffs during the holidays, contributed to December experiencing the lowest number of monthly job cuts in more than 15 years, according to the report released today by global outplacement consultancy Challenger, Gray & Christmas, Inc.
U.S.-based employers announced planned workforce reductions totaling 23,622 in December. That was 24 percent lower than the 30,593 job cuts announced in November and 28 percent below last year’s 32,640 December job cuts.
December was not only the lowest job-cut month of 2015, it was the lowest job-cut month since June 2000, when employers announced 17,241 planned layoffs. Last month also represents the lowest December job-cut total on record, since Challenger began its monthly tracking in 1993.
The December decline was significant enough to prevent 2015 job cuts from reaching a six-year high. In all, employers announced 598,510 job cuts during the year, 24 percent more than the 483,171 planned layoffs in 2014.
While 2015 total still saw the heaviest downsizing activity since 2011 (606,082), the year definitely ended with job cuts on the decline. Employers announced 105,072 job cuts in the fourth quarter, down 49 percent from 205,759 in the previous quarter. The fourth quarter total was 12 percent lower than the 119,763 job cuts announced during the same quarter in 2014.
The 105,072 job cuts announced in the final three months of 2015 represents the lowest quarterly total since the third quarter of 2012, when employers cut 102,910 workers from their payrolls.
“It used to be that companies would not hesitate to announce job cuts around the holidays. In fact, the heaviest job-cut period of the year was often in the closing months. However, that appears to have changed in the wake of the Great Recession,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
According to Challenger data, the average December job cut total from 2009 through 2015 was 34,046. That is 37 percent lower than an overall monthly average of 53,835 recorded during that period.
Meanwhile, from 2000 through 2008, employers announced an average of 107,056 job cuts in December, which was 13 percent higher than the 94,611 monthly job cuts averaged over that entire period.
“Companies are more cognizant than ever of their public image, particularly in the era of social media. It’s not that job cuts are entirely off limits, but the numbers suggest that employers may be more reluctant to announce large-scale layoffs around the holidays. It could also be that, as more companies measure and revise goals and objectives quarter-to-quarter, the importance of making strategic moves at the end of the year has diminished,” said Challenger.
“Whatever the reason, the apparent improvement in job security around the end of the year is good news for the nation’s workers. In 2015, the December decline may provide little solace for those workers impacted by heavy downsizing through the first half of year.”
Workers in the energy sector, as well as those in sectors peripherally related to the exploration and extraction of oil, were significantly impacted by falling oil prices. Of the 287,672 job cuts announced in the first six months of 2015, 69,582 or nearly one-quarter, were blamed on oil prices.
The pace of oil-related job cuts eased in the second half of the year, but they still represented 11 percent of the 310,838 job cuts announced from July through December.
Due in large part to the drop in oil prices, the energy sector saw the heaviest job cutting in 2015, ending the year with 94,409 announced layoffs. That is nearly seven times more than the 14,262 job cuts announced in this industry in 2014.
Large-scale cut backs in the military contributed to a 211 percent increase in government-sector job cuts. The majority of the 70,029 job cuts reported by government agencies in 2015 occurred in July, when the United States Army announced plans to cut 57,000 troops and civilian personnel from its ranks.
“In addition to the energy and government sectors, the retail, computer and industrial goods sectors also saw increased job cuts in 2015. However, despite the increased cuts in these areas, the overall outlook for the economy remains positive,” said Challenger.
“This does not necessarily mean fewer job cuts, though,” he warned. “We are at a point in this economic expansion where we could see a lot volatility as companies make strategic moves to make the most of growth opportunities. That could mean more mergers, more leadership changes and more movement of resources from weak business lines to those with more promise. All of these actions could potentially result in workforce adjustments in 2016 and beyond.
“The good news for those impacted by downsizing is that all of this churn should also result in good employment opportunities. Those with the right skills and experience should land quickly, particularly if they employ an aggressive job search strategy,” said Challenger.Download Resource