COVID is no longer the leading cause of cuts.
Planned job cuts announced by U.S.-based companies rose 3.3%, to 79,552, in January from 77,030 in December, according to a report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
January’s total is 17.4% higher than the 67,735 cuts announced in the same month last year. It is the highest January total since 2009, when 241,749 cuts were announced.
“While cuts were higher than average last month, we are seeing a leveling off of announcements, which may bode well for recovery in the coming months. Companies may be reassessing their staffing levels and waiting on the impact of the relief bill before making any additional workforce decisions,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
What Industries are Making Cuts?
January job cuts were led by the Aerospace/Defense industry, which announced 29,100 cuts. The industry has seen turmoil caused by a downturn in orders for commercial airliners, as travel dried up due to the pandemic. This sector announced 86,125 cuts in 2020, a record high. The previous record occurred in 2002, with 53,888 announced cuts in the sector. This marked the first month since February that job cut announcements were not led by the Entertainment/Leisure or Transportation sectors.
“This appears to be a new wave of layoffs hitting deeper than the initial blow,” said Challenger.
Telecommunications announced the second-highest number of cuts last month with 19,002. This sector has seen disruption for over a decade, as new technology has changed the way consumers communicate. This industry announced 33,133 cuts last year, the most since 2018, when 59,568 were announced.
Warehousing announced the third-highest number of job cuts in January with 6,601, likely due to seasonal positions ending, followed by Entertainment/Leisure with 6,399.
Of the 742 Media cuts announced in January, 242 occurred in digital, print, and broadcast news.
Why are companies cutting?
The leading reason for job cut announcements in January was demand downturn, followed by restructuring. Market conditions accounted for 15,056 cuts in January. COVID-19 was cited for 4,620 job cuts in January.
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Other data on Thursday from global outplacement firm Challenger, Gray & Christmas showed planned job cuts announced by US-based employers rose only 3.3% to 79,552 in January.
— ChallengerGray (@ChallengerGray) February 6, 2021