Published May 4, 2023
Job Cuts Fall to Lowest Point of the Year, up 176% Over Same Month Last Year, YTD up 322%; Hiring Down 81% YTD
U.S.-based employers announced 66,995 cuts in April, a 176% increase from the 24,286 cuts announced in April 2022. It fell 25% from the 89,703 cuts announced in March, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
April’s total marks the fourth consecutive month this year job cuts were higher than the corresponding month one year earlier.
Source: Challenger, Gray & Christmas, Inc. ©
So far this year, employers announced plans to cut 337,411 jobs, a 322% increase from the 79,982 cuts announced in the first four months of 2022. This is the highest January-April total since 2020, when 1,017,812 cuts were announced through April. With the exclusion of 2020, this is the highest January-April total since 2009, when 711,100 cuts were announced in the first four months of the year.
Which Industries Are Cutting Workers?
Retail & Consumer Products
Retail led all industries in April with 14,689 cuts, up 270% from the 3,970 Retail cuts announced in March. So far this year, Retailers have announced 36,115, an 843% increase from the 3,830 Retail cuts announced in the same period last year. Meanwhile, Consumer Products Manufacturers announced the third-highest number of cuts last month with 9,146 for a total of 19,116. This is a 391% increase from the 3,893 cuts announced through April 2022.
“Retailers and Consumer Goods Manufacturers are preparing for a tightening in consumer spending, particularly with the Fed’s hike to interest rates in an attempt to control inflation,” said Andrew Challenger, labor and workplace expert and Senior Vice President of Challenger, Gray & Christmas, Inc.
Technology
The Technology sector announced the second-most cuts in April with 11,553, and leads all industries in cuts this year with 113,944, 34% of all cuts announced in 2023. The year-to-date total is up 24,724% from the 459 cuts announced through April 2022. April marked the lowest number of layoffs in this sector since October 2022, when 9,587 cuts were announced.
Source: Challenger, Gray & Christmas, Inc. ©
Health Care/Products
Health Care/Products, which includes hospitals and medical products manufacturers, announced the fourth-most cuts in April with 6,184, for a total of 29,134, up 83% from the 15,928 cuts announced through April last year.
Financial and Fintech
“Finance, both traditional and digital, are grappling with rate increases and the potential for lower consumer spending, just as Retail and Consumer Manufacturers are. We’ve also seen large banks fail recently, which will mean a more cautious approach in the sector going forward,” said Challenger.
Indeed, Financial firms have cut 33,356 cuts so far this year, a 285% increase from the 8,675 cuts announced through April 2022. Meanwhile, Fintech, which includes crypto currency exchanges and digital payment platforms, announced plans to cut 9,531 jobs this year, an increase of 2,066% from the 440 announced during the same period last year.
Hiring Plans
Though job cuts fell in April from March, hiring plans have also fallen significantly from 2022. In April, companies announced plans to add 23,310 positions for a total of 93,948 so far this year. This is down 81% from the 486,603 hiring plans announced in the same period last year. It is the lowest number of announced hiring plans through April since 2016, when Challenger tracked 38,455 hiring plans in the first four months of the year.
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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
Jobs Report Better Than Expected: Labor Market Adds 253,000, Unemployment Ticks Down To 3.4%
Amid waves of layoffs hitting some of the nation’s largest tech employers, the unemployment rate has ticked up from a 54-year low of 3.4% in January but remained near historically low levels. Layoffs, however, have since spread to other industries, with manufacturing giant 3M and Vice Media among those cutting thousands of jobs last month. On Thursday, outplacement firm Challenger, Gray & Christmas reported employers have cut roughly 337,000 jobs so far this year—a 322% jump from the same period in 2022. In a statement, the firm’s Andrew Challenger noted retailers and consumer goods manufacturers, in particular, are preparing for tightening in consumer spending, as the Fed hikes interest rates (which tend to slow the economy) in an attempt to control inflation.
However, new data shows job vacancies dropped to 9.59 million in March, the lowest level in almost two years. That still leaves about 1.6 open jobs to every available worker, which is “very good,” according to Andy Challenger, senior vice president at outplacement firm Challenger, Gray & Christmas.
Click image to see original article on CNBC.com.
Moreover, month-over-month wage gains are still taking place and quits rates are pretty high as people continue to feel comfortable finding positions that are a better fit, he noted.
Even if the Fed achieves a perfect soft landing with the economy, it will still likely mean increased layoffs and fewer job opportunities, Challenger said. But for now, it’s still a pretty good time to be job searching, even though the market has cooled from six months ago, he added.
“The labor market may never be this good again in our lifetimes,” Challenger said. “It’s never been before.”
The sector has cut 36,000 jobs this year, which is still well below the 114,000 jobs cut by technology companies, including Meta Platforms Inc and Amazon.com Inc, according to a report by Challenger, Gray & Christmas Inc.
“Retailers and Consumer Goods Manufacturers are preparing for a tightening in consumer spending, particularly with the Fed’s hike to interest rates in an attempt to control inflation,” said Andrew Challenger, senior vice president at the firm.
So far this year, major retail and consumer companies including Gap Inc and Walmart have announced job cuts.
US Jobless Claims Rise Most in Six Weeks, Continuing Claims Fall
US employers announced about 67,000 job cuts last month, bringing the total this year to roughly 340,000, according to data from consulting firm Challenger, Gray & Christmas Inc. out Thursday. That’s about four times more than in the first four months of 2022. At the same time, companies scaled back their hiring plans at the start of the year to the lowest level since 2016.
