Job cuts announced by U.S.-based employers jumped in July to 262,649, the third-largest monthly total ever behind April’s 671,129 and May’s 397,016, according to a monthly report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
July’s total is 54% higher than the 170,219 job cuts announced in June, and 576% higher than the July 2019 total of 38,845. Prior to the COVID-19 pandemic, the highest monthly total of job cuts was 186,350 in February 2009.
The reason cited for 77,092 of the announced cuts is market conditions. COVID-19 caused 63,517 cuts in July, followed by 60,831 job cuts due to demand downturn, and 17,069 cuts due to voluntary severance/buyouts. COVID-19 is the reason for 1,074,904 cuts so far this year.
“The lapse in extended unemployment benefits for millions of Americans will significantly impact the economy, as we see more employers announce they are cutting jobs permanently,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“The downturn is far from over, especially as COVID cases rise around the country. Consumers are buying fewer goods and services, businesses are closing, and bankruptcies are rising,” he added.
In fact, 1,977 job cuts were attributed to bankruptcies last month, for a seven-month total of 11,558. Another 79,497 cuts so far this year are due to closings.
The majority of cuts continue to come from Entertainment/Leisure companies, including bars, restaurants, hotels, and amusement parks, which announced 109,940 cuts in July, an 18% increase over the industry’s 92,954 cuts announced in June, and a 21,976% increase over the 498 Entertainment/Leisure cuts tracked in July 2019. So far this year, these companies have announced 781,780 cuts, an 8,309% increase over the 9,297 cuts announced in the sector through July 2019.
Retailers announced the second-highest number of job cuts this year with 163,112, 196% higher than the 55,167 cuts announced through the same period last year.
The Services sector, which includes companies that provide catering, linen, marketing, and administrative services, announced 121,741 cuts so far in 2020, 781% higher than the 13,812 cuts announced through the same period in 2019.
The Transportation sector has announced 105,026 job cuts so far this year, a 452% increase over the 19,039 jobs cut through July 2019. The Automotive sector cut 83,853 jobs in July, a 144% increase over the 34,379 cuts in July 2019.
Hiring announcements almost equaled the number of jobs cut in July, as companies announced 246,507 hiring plans. Warehousing led with 100,340 hires, as more and more Americans shop online. Government plans to add 22,024 jobs, and the Services sector is looking to add 33,485 jobs. So far this year, 1,582,622 hiring plans have been announced.
“The long-lasting ramifications of COVID-19 on certain industries are readily apparent. It is clear that many job losses are now permanent, and it will be challenging for many workers to find new jobs and feel safe taking jobs that are public-facing,” said Challenger.
Download the full report with tables below.
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