Published January 4, 2024
U.S.-based employers announced 34,817 cuts in December, down 24% from the 45,510 cuts announced in November, and the second-lowest monthly total in 2023 after the 23,697 job cuts announced in July. It is down 20% from the 43,651 cuts announced in the same month one year prior, according to a report released Thursday from global outplacement and leadership development and executive coaching firm Challenger, Gray & Christmas, Inc.
In the fourth quarter, companies announced plans to cut 117,163 jobs, down 20% from the 146,305 cuts announced in the third quarter of the year. It is down 24% from the 154,329 cuts which occurred in the final quarter of 2022.
Challenger, Gray & Christmas, Inc. ©
In 2023, companies planned 721,677 job cuts, a 98% increase from the 363,824 cuts announced in 2022. It is the highest annual total since 2020, when 2,304,755 cuts were recorded. With the exception of 2020, it is the highest total since 2009, when 1,288,030 job cuts were announced.
“Layoffs have begun to level off, and hiring has remained steady as we end 2023. That said, labor costs are high. Employers are still extremely cautious and in cost-cutting mode heading into 2024, so the hiring process will likely slow for many job seekers and cuts will continue in Q1, though at a slower pace,” said Andy Challenger, workplace and labor expert and Senior Vice President of Challenger, Gray & Christmas, Inc.
When Are Job Cuts Typically Announced?
Since 1993, companies have cut the most jobs on average at the start of Q1 and Q2. However, the last decade has seen a shift from Q1 and Q4 in the previous decade to primarily Q2.
“Fiscal year-ends have shifted over time, and companies started moving away from cutting workers right before and after the holidays. There’s no doubt the arrival of social media, which allowed workers to widely share their layoff experiences, forced many employers to reevaluate their processes,” said Challenger.
Challenger, Gray & Christmas, Inc. ©
Industries Cutting The Most Jobs
Technology led all industries in job cut announcements last year with 168,032, up 73% from the 97,171 cuts announced in 2022. The number of cuts in the sector fell precipitously over the summer, and then increased in Q4. In December, Technology companies announced 4,470 cuts. This year’s total fell just short of the annual record of 168,395 cuts announced for the sector in 2001.
Challenger, Gray & Christmas, Inc. ©
“The Tech sector will continue to be impacted by the onset of AI, mergers and acquisitions, and realigning of resources and talent,” said Challenger.
Retail companies announced the second-most job cuts this year with 78,840, a 274% increase from the 21,054 cuts announced in the sector during the same period one year prior. Last month, the sector announced just 110 cuts for the month, the lowest monthly total since December 2012 when 22 cuts were announced in the sector.
“Retailers needed to be on their toes around the holidays. Many exercised caution and flexibility in their approach to hiring, and as consumers continued to spend, held on to their workers,” said Challenger.
Health Care/Products manufacturers, including Hospitals, announced the third-most cuts this year with 58,560, a 91% increase from the 30,626 cuts announced in 2022.
Financial firms announced 57,052 cuts in 2023, up 133% from the 24,437 cuts announced in 2022.
Media Cuts
The Media industry shed 21,417 cuts last year, up 467% from the 3,774 announced in the same period in 2022. It is the highest total for the sector since 2020, when 30,711 cuts were recorded. Prior to 2020, it is the highest total since 2009, when Media companies cut 22,346 jobs.
Of the Media cuts tracked last year, 3,087 were in digital, broadcast, and print News, surpassing the 1,808 and 1,511 that were announced in all of 2022 and 2021, respectively. It is the highest total since 2020, when 16,060 cuts were tracked in the News sector.
Why Are Companies Cutting?
The top reason for job cuts in 2023 was Market/Economic Conditions with 233,448. Another 117,408 were attributed to business, unit, or store Closing. Bankruptcy was cited for 32,053 cuts in 2023, or 4% of cuts announced last year, up from 0.2% of cuts announced in 2022. Companies cited Artificial Intelligence for 4,247 cuts in 2023, 150 of which occurred in December.
Hiring Plans
US-employers announced plans to add 780,123 positions in 2023, down 47% from the 1,482,364 in 2022. It is the lowest number of announced hiring plans since 2015, when employers planned to hire 690,751 workers. In December, 3,022 hiring plans were announced, the lowest monthly total since Challenger began tracking detailed hiring plans in 2009.
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SVP Andy Challenger is available for interviews on the job market, economy, and job search process. Please contact Colleen Madden Blumenfeld for more information.
Employers from Amazon to BlackRock show a continued push to do more with less
By Chip Cutter and Natasha Khan
PUBLISHED JANUARY 12, 2024
More layoffs might be coming across American corporations, Challenger said, based on his conversations with executives. Though leaders will likely not slash positions across the board this year, more trims are likely.
“It’s all about cost-cutting right now,” he said.
ADP: 164K Jobs Added as Hiring Surges
Layoffs also have been below trend, even as industries such as technology, financial services and the media adjust their workforce levels after ramping up during the pandemic.
Outplacement firm Challenger, Gray & Christmas said on Thursday that announced layoffs by U.S.-based employers in December fell 24% to 34,817 cuts from November. It was the second-lowest monthly total in 2023 after July’s cuts of 23,697 jobs and down 20% from the level of a year ago.
“Layoffs have begun to level off, and hiring has remained steady as we end 2023,” said Senior Vice President Andy Challenger. “That said, labor costs are high. Employers are still extremely cautious and in cost-cutting mode heading into 2024, so the hiring process will likely slow for many job seekers and cuts will continue in Q1, though at a slower pace.”
Watch Andy Challenger on Yahoo! Finance
Layoffs soared 98% in 2023 with employers in cost-cutting mode
“Layoffs have begun to level off, and hiring has remained steady as we end 2023. That said, labor costs are high,” said Andy Challenger, senior vice president at Challenger, said in the report. “Employers are still extremely cautious and in cost-cutting mode heading into 2024, so the hiring process will likely slow for many job seekers and cuts will continue in Q1, though at a slower pace.”
The tech industry led the country in the job cuts with a 73% increase last year to 168,032. That’s just shy of the annual record of 168,395 cuts in tech in 2001.
Andy Challenger talks economic news on Yahoo! Finance.
“The Tech sector will continue to be impacted by the onset of AI, mergers and acquisitions, and realigning of resources and talent,” Challenger added in the report.
In second place came the retail industry with 78,840 job cuts, a 274% increase from the previous year. Healthcare and financial employers came in third and fourth place, respectively.
“While there is a lot of hiring happening in healthcare, we’ve also seen a lot of turnover there, some more volatility than most industries,” Challenger told Yahoo Finance in an interview earlier this week. “Because like technology, and like finance, those were areas that really spiked and had to come back down to Earth with the changes that were happening in the post-COVID period.”
Data from Challenger, Gray & Christmas, Inc. featured on Yahoo! Finance
Labor Market Ends 2023 With a Bang, Adding 216K Jobs
On Thursday, outplacement firm Challenger, Gray & Christmas said that announced layoffs in December fell 24% to 34,817 cuts from November. It was the second-lowest monthly total in 2023 after July’s cuts of 23,697 jobs and down 20% from the level of a year ago.
(BRETT COOMER | HOUSTON CHRONICLE)
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