Job Cut Announcements Drop 34% From March 2019; YTD Cuts Up 31%
Published May 2, 2019
U.S.-based employers announced plans to cut 40,023 jobs from their payrolls in April, down 34% from the 60,587 cuts announced in March. This is the lowest monthly total since last August, when 38,472 cuts were announced, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Despite the monthly drop, April cuts are up 11% from the same month last year, when 36,081 cuts were announced. So far this year, employers have announced 230,433 job cuts, 31% higher than the 176,280 announced in the first four months of last year.
“The second quarter averages the fewest cuts of the year, according to our historical tracking. With the favorable jobs report from the Bureau of Labor Statistics in March, this could signify companies are slowing down plans to cut workers for the spring and summer months,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
“That said, high job cut numbers in the Manufacturing and Automotive sectors are troubling, as changes in these industries tend to have a trickle-down effect,” he added.
April job cuts were led by manufacturers in the Industrial Goods sector, which announced 5,159 cuts last month. So far this year, this sector has announced 39,304 cuts, the second-highest total after Retail. That is 750% higher than the 4,625 cuts announced in this sector through April 2018.
Consumer Products manufacturers follow with 4,705 announced cuts in April.
“Manufacturing is an important sector to watch in the coming months. While first-quarter GDP growth was strong, we saw consumer spending add only .82%,” said Challenger.
Cuts in the Automotive sector were the third highest in April with 3,915, bringing the year-to-date total to 19,802, 207% higher than the 6,451 announced through April last year. Meanwhile, the 12,179 year-to-date cuts in the Energy sector are 323% higher than the 2,879 announced in the same period in 2018.
Retailers continue to lead all sectors in job cuts this year with 48,076. That is 25% lower than the 64,370 Retail cuts announced through April last year. According to Challenger tracking, Retailers have announced plans to shutter 4,397 stores so far this year.
The majority of cuts this year are due to “restructuring,” with 55,706 cuts announced due to this reason. Bankruptcy claimed another 40,560 this year, a 35% increase over the 30,060 cuts announced for this reason through April 2018. Another 35,859 were due to plant, unit, or store closures, down 43% from the 62,946 cuts for this reason at this point last year.
“While the lower number of cuts last month is certainly a good sign, and we saw a huge hiring announcement in the Retail sector from McDonald’s last month, we are still seeing more than a 30% increase in cuts over last year. The sectors that are making cuts could indicate trouble ahead,” said Challenger.
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Note: Challenger has updated the names of two industries to better describe the companies that are tracked therein. “Computer” will now be labeled “Technology” and “Commodities” will now be called “Mining.”
Challenger is also breaking out Financial Tech firms, which will be referred to as “FinTech.” These changes are represented in Table 2 (Job Cuts by Industry) and Table 7 (Announced Hiring Plans).Download Full Report