Published June 6, 2024
U.S.-based employers announced 63,816 cuts in May, a 1.5% decrease from the 64,789 cuts announced one month prior. It is down 20% from the 80,089 cuts announced in the same month in 2023, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
So far this year, companies have announced 385,859 job cuts, down 7.6% from 417,500 announced through May of last year. It is the third-highest January-to-May total since 822,282 cuts were recorded through May 2009. The highest January-May total occurred in 2020, when 1,414,828 job cuts were recorded.
Challenger, Gray & Christmas, Inc. ©
“Job cuts remained flat in May as companies assess performance and make plans for Q3 and Q4. Meanwhile, hiring announcements are at their lowest levels in a decade. The typical churn in a healthy labor market appears to be stalling,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“Cuts in the Technology sector dominated announcements last year. While the sector continues to make cuts, it isn’t nearly at the same pace,” he added.
Which Industries Are Cutting Workers?
Technology
Indeed, the Technology sector continues to lead all industries in job cut announcements with 55,207, 7,771 of which occurred in May. The year-to-date total is a 60% decrease from the 136,831 job cuts in the Technology sector announced during the same period last year.
Challenger, Gray & Christmas, Inc. ©
Automotive, Energy, Aerospace/Defense
Automakers are cutting jobs at a faster clip than during the same period last year. So far in 2024, the sector has announced 21,328 cuts, up 18% from the 18,017 cuts announced through May 2023.
Energy companies, experiencing many of the same issues as Auto makers, have announced 5,544 job cuts through May, an increase of 316% from the 1,333 cuts announced in this sector during the same period last year.
Companies in the Aerospace/Defense sector have announced 8,222 cuts through May, up 102% from the 4,065 cuts announced in this sector during the same period last year.
“Companies are grappling with new technologies, artificial intelligence, new competition, legislation requiring energy efficiency, and consumer demand. Labor disputes have also impacted operations at many of these firms,” said Challenger.
Entertainment/Leisure, Retail, Apparel
Companies in the Entertainment/Leisure space have announced 17,599 cuts this year, 63% more than the 10,769 cuts announced in the sector through May 2023. Meanwhile, Retailers have announced 45,168 cuts through May. This is an increase of 123% from 20,276 announced during the same period last year.
Apparel manufacturers have announced 5,578 cuts so far this year, an increase of 409% from the 1,096 announced through the same period in 2023.
“Consumer-facing sectors are feeling the pinch of rising costs, not only their own labor costs, but also consumers’ tightening their spending,” said Challenger.
Media & News
The Media industry, which includes television, film, streaming, and News, announced 8,410 job cuts so far this year, down 52% from the 17,436 announced in the industry through May 2023.
News, which includes digital, broadcast, and print, and is tracked as a subset of Media, announced 55 layoffs in May for a total of 2,239, up 14% from the 1,972 cuts tracked during the same period last year.
Why Are Companies Cutting?
Last month, 15,785 job cuts were due to store, unit, or plant “Closing,” the highest monthly total for that reason since September 2023 when 19,462 cuts were attributed to this reason. For the year, “Closing” has caused 64,902 cuts.
“Cost-cutting” is the leading cause for job cuts so far this year with 78,087. “Restructuring” has accounted for 61,667 job cut plans this year.
“Employers across the board are citing vague reasons for cutting jobs, but we know artificial intelligence and the disruption that follows is the cause, at least in part, for many companies’ plans. The disruption is impossible to refute. That said, other economic factors are also at play in many of these announcements,” said Challenger.
Since May of 2023, companies have cited AI for 5,430 job cuts due to AI, either because the companies were pivoting to developing it or because it replaced tasks and roles. “Economic/Market Conditions” was cited for 10,671 cuts last month, for a total of 60,866.
Another 311 job cuts were attributed to Texas Senate Bill 17 (SB-17), which went into effect on January 1, 2024 and banishes DEI initiatives at public higher education facilities. For the year, a total of 391 job cuts were attributed to this reason.
Hiring Plans Lowest Since 2014
U.S. employers announced plans to hire 4,326 workers in May, the lowest total since 3,022 hires were announced in December 2023, and the lowest total for the month on record. For the year, employers have announced plans to hire 50,833 workers, a 50% decline from the 101,833 new hires announced through this point last year. It is the lowest total in the first five months of the year since 2014, when 45,512 hiring plans were recorded.
Download Full Report with Tables
