JOB CUTS REMAIN LOW AT THE START OF SUMMER; 24,586 JOB CUTS ANNOUNCED IN MAY
Job cuts announced by U.S.-based employers rose 7% in May to 24,586 from the 22,913 announced in April. Last month’s total is down 93.8% from May 2020, when employers announced 397,016 cuts, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
So far this year, employers have announced plans to cut 192,185 jobs from their payrolls, down 86% from the 1,414,828 jobs eliminated through the same period last year.
“Many employers, especially those hit hard during the pandemic, such as Retailers and Hospitality and Leisure companies, are having a difficult time finding workers. Many are offering signing bonuses or higher wages to attract workers,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“As the labor market tightens, as is typical, workers may find employers offering more attractive perks and benefits, including higher starting wages, as they look for positions,” he added.
In fact, according to the latest data from the Bureau of Labor Statistics, the average hourly wage rose to $30.17 in April from $29.96 in March. Meanwhile, Amazon is offering $1,000 signing bonuses for new workers, while Tops Friendly Markets, a grocery chain in New York, is offering $2,000 signing bonuses for eligible positions.
Industries With the most cuts
Health Care/Products led all industries in cuts in May with 2,775, followed by Education with 2,617. This industry includes cuts in early childhood education.
Transportation companies cut 2,285 jobs, while companies in the Automotive sector announced 2,109 cuts last month.
Aerospace/Defense leads all industries in job cuts this year with 32,779, a 30% decrease from the 47,010 announced through May 2020. Telecommunications follows with 24,824 cuts, down 11% from the 27,961 cuts announced last year.
Why Are Companies Cutting Employees?
Cuts attributable to COVID-19 fell to 686 in May, from 209,147 announced in May 2020. So far this year, employers used this reason for 7,608 cuts, compared to 984,037 through May of last year.
Challenger tracked 783 cuts attributed to the COVID-19 recovery phase last month, including from companies who made masks and other personal protective equipment cutting workers as demand dips.
RECENT HIRING PLANS
Employers announced 49,118 hiring plans in May, the lowest monthly total since last May, when 38,981 hiring plans were announced.
NEWS & MEDIA INDUSTRY DATA
Challenger continues to follow losses in the News industry, which is tracked as a subset of Media cuts. Through May, Newsrooms have announced 963 job cuts, with 88 occurring in May. That is down 91% from the 10,576 cuts through the same period last year, with 7,804 occurring in May 2020. These cuts include digital, print, and broadcast news.
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For the 2nd month in a row, the labor market has seen a record number of open jobs — and with a record-high 2.7% quit rate, it’s an indication that workers are ready to walk rather than remain in a job they dislike. https://t.co/VYcvu2KwYQ
— NBC News (@NBCNews) June 9, 2021
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America’s stores are having trouble bringing on staff to meet growing demand from customers as the US economy regains steam. So they’re turning to an incentive less commonly deployed in the retail industry: sign-on bonuses for new hires. https://t.co/ioQBl0T9ni
— CNN Business (@CNNBusiness) June 7, 2021