U.S. EMPLOYERS ANNOUNCED FEWEST JOB CUTS ON RECORD IN 2021; 19,052 CUTS IN DECEMBER

Published January 6, 2022

 

Job cuts announced by U.S.-based employers rose 28.1% in December to 19,052 from the 14,875 announced in November. It is 75.3% lower than the 77,030 announced in December 2020, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

Source: Challenger, Gray & Christmas, Inc. © | Digital Artist, Nicole Lobdell

Source: Challenger, Gray & Christmas, Inc.

In the final quarter of 2021, U.S. companies announced 56,749 job cuts, up 7.4% from the 52,560 announced in the third quarter, and down 74.5% from the 222,249 cuts announced in the same quarter of 2020.

In 2021, employers announced plans to cut 321,970 jobs from their payrolls, down 86% from the 2,304,755 jobs eliminated in 2020. It is the lowest annual total on record, since Challenger began tracking in 1993.

Source: Challenger, Gray & Christmas, Inc. © | Digital Artist, Nicole Lobdell

Source: Challenger, Gray & Christmas, Inc.

Challenger analysis and how COVID influences the numbers

“Quits hit a new record in November with 4.5 million. Workers are leaving jobs in droves, particularly in-person jobs in Entertainment/Leisure, Health Care, and Transportation, according to the Department of Labor. This trend is likely to continue as we contend with the largest surge in COVID cases we’ve yet seen, spurred by Omicron,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

“The sheer number of COVID cases will impact the labor market, regardless of how severe illnesses are. Working parents are dealing with massive interruptions in schooling, requiring them to revert to managing virtual classes or take over child care themselves. Meanwhile, those with COVID safety concerns will continue to shun in-person roles.

“The main difference between now and prior COVID waves is that much of the financial support from the government – expanded unemployment benefits, pandemic pay, sick leave, child credits, student loan payment suspension, eviction moratoriums – is gone, which may push workers who were leaving the workforce for child care, COVID concerns, or burnout back into the labor market before they would have with that assistance intact,” he continued.

Two industries announced more job cuts in 2021 than in 2020: Pharmaceutical and Chemicals. Companies in the Pharmaceutical industry announced 8,116 job cuts in 2021, a 280% increase over the 2,131 announced in 2020. Chemical companies shed 881 jobs in 2021, up 165% from the 332 cuts recorded in 2020.

“Pharmaceutical and Chemical companies were tasked with creating COVID treatments and testing in 2020. Those that failed or saw demand fall as vaccines became available and cases fell at various points in the past year shed jobs,” said Challenger.

Meanwhile, the Federal Occupational Health and Safety Administration (OSHA) rule that will require companies with at least 100 employees to ensure workers are either vaccinated or tested regularly is headed to the Supreme Court with oral arguments to begin January 7th.

COVID vaccine refusal eliminates more than 7,000 jobs

Vaccine refusal has accounted for 7,634 job cuts so far this year, primarily in hospitals, 407 of which occurred last month. The deadline for compliance with the OSHA rule was January 4th.

“January may see more cuts due to workers’ refusal to get vaccinated, since many companies imposed deadlines for this month,” said Challenger.

Andrew Challenger

Source: Challenger, Gray & Christmas, Inc.

U.S. industries leading in cuts

Companies in the Health Care/Products sector announced the most job cuts in December with 4,550, for a total of 31,997 for the year, down 49.7% from the 63,576 cuts recorded in 2020.

Source: Challenger, Gray & Christmas, Inc. © | Digital Artist, Nicole Lobdell

Source: Challenger, Gray & Christmas, Inc.

Aerospace/Defense companies have announced the most cuts this year with 34,627, 59.8% lower than the 86,125 announced through 2020.

Newsroom & media industry job loss

According to Challenger tracking, Newsrooms cut 1,511 jobs in 2021 out of the 3,961 Media cuts the firm tracked last year. That’s compared to the 16,060 News cuts recorded in 2020.

Announced reasons for employee dismissals 

Company closings caused the most cuts in 2021 with 69,648, followed by restructuring, which was cited for 58,712 cuts so far this year. Market conditions were cited for 54,160. COVID-19 has been cited as the reason for 8,904 cuts this year, compared to 1,109,656 cuts attributed to COVID-19 in 2020.

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Challenger's Media Coverage

Supreme Court’s vaccine mandate ruling means businesses chart their own course

Published January 21, 2022

  • Some companies press ahead with vaccine requirements. Others are pausing.
  • The mandate, which was to take effect Feb. 9, would have affected about 84M workers.
  • Among workers, 36% say their company requires employees to be vaccinated.

Imposing mandate was ‘extra hurdle’

Meanwhile, businesses that were reluctant to impose mandates may be relieved that at least for now, they are off the hook, workforce experts and labor attorneys say.

“It’s a very tight labor market right now where companies are struggling mightily to find enough workers,” says Andy Challenger, senior vice president of Challenger, Gray & Christmas, an outplacement company. “For some of them, this mandate was an extra hurdle they’ll be glad is not in their way of hiring.’’

That may be particularly true for retail, restaurant and hotel companies which are among the businesses that have had the most difficulty finding staff during the pandemic.


 

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