Massive Troop and Civilian Reductions Lead to First 100,000+ Month Since 2011

Monthly job cuts rocketed to the highest level in nearly four years, as U.S. employers announced plans to shed 105,696 workers from their payrolls in July, according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

The July total is 136 percent greater than the 44,842 job cuts recorded in June. It is 125 percent higher than the same month a year ago, when planned workforce reductions totaled 46,887. The last time more than 100,000 job cuts were announced in a single month was September 2011, when they reached 115,730.

The July surge brings the year-to-date job cut total to 393,368, which is 34 percent higher than the 292,921 cuts announced in the first seven months of 2014. This represents the highest seven-month total since 2009, when 978,048 job cuts were announced amid the worst recession since the Great Depression.

Job Cuts Surge on Army Cuts

More than half of the July job cuts were the result of massive troop and civilian workforce reductions announced by the United States Army. The cutbacks will eliminate 57,000 from government payrolls over the next two years.

“When the military makes cuts, they tend to be deep. In fact, the last time we saw more than 100,000 job cuts in September of 2011, it was 50,000 cuts by the US Army that dominated the total. With wars in Afghanistan and Iraq winding down and pressure to cut government spending, the military has been vulnerable to reductions,” said Challenger.

Indeed, some of the biggest job cuts announced in recent years have come from the military and other government agencies. In addition to the 50,000 cuts announced by the US Army in 2011, the United States Air Force announced plans in 2005 to reduce its headcount by 40,000. Between 2002 and 2010, the United States Post Office announced three separate job cuts that affected a total of 90,000 workers.

“The transition from the military to the civilian workforce is always challenging, but the economy is in a much better position to absorb this influx of job seekers now, compared to two or three years ago. This does not mean it will be easy for these service men and women, most of whom undoubtedly thought the military would offer career-long job security,” noted Challenger.

“The most difficult part of the transition may be translating one’s military experience into terms that are meaningful to civilian employers. These men and women have skills and experience that are in demand, but they just don’t know how to describe them in a way that non-military recruiters understand. Luckily, there are a growing number of programs and services that help with this and there has been a concerted effort among the nation’s employers to hire former military,” he added.

According to the Bureau of Labor Statistics, the unemployment rate among Gulf War II veterans, which includes those from the conflicts in Iraq and Afghanistan, has fallen from a high of 15.2 percent in January 2011 to a current level of 5.4 percent, which matches the national average for all labor force participants.

Tech and Electronic Industries

While the government sector saw the heaviest cuts last month due to military cutbacks, the technology sector also announced several major workforce reductions. Microsoft shuttered the recently acquired Nokia division, which resulted in 7,800 job losses. Electronics and telecommunications equipment manufacturer Qualcomm announced plans to shed 4,500 workers. Chipmaker Intel Corp. also announced workforce reductions totaling 3,180 during the month.

Together, computer and electronics firms announced 18,891 job cuts in July. Computers firms have now announced 25,542 job cuts this year, which is 47 percent lower than the 48,361 cuts announced by these employers by this point last year.

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