Challenger June 2021 Job Cuts Report
Published July 1, 2021
Companies Holding Tight to Their Teams
Job cuts announced by U.S.-based employers fell 16.7% in June to 20,476 from 24,586 cuts announced in May. Last month’s total is the lowest monthly total since June 2000, when 17,241 job cuts were recorded, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
June’s total is 88% lower than the 170,219 recorded in June of last year.
In the second quarter, employers announced 67,975 job cuts, the lowest quarterly total since the second quarter of 1997, when 51,309 cuts were announced. It is down 53% from the first quarter total of 144,686, and 95% lower than the 1,238,364 announced in the same quarter last year.
So far this year, employers have announced plans to cut 212,661 jobs from their payrolls, down 87% from the 1,585,047 jobs eliminated through the same period last year. It is the lowest January-June total since 1995, when 212,299 job cuts were tracked in the first six months of the year.
Source: Challenger, Gray & Christmas, Inc.
Challenger Analysis
“We’re seeing the rubber band snap back,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“Companies are holding on tight to their workers during a time of record job openings and very high job seeker confidence. We haven’t seen job cuts this low since the Dot-Com boom,” he added.
What Industries are making cuts?
Companies in Aerospace/Defense have announced the most cuts this year with 32,930, down 38% from the 53,284 cuts announced in the sector through this point last year. Telecommunications follows with 24,824 cuts, down 15% from the 29,100 announced during the same period last year.
The Energy sector, which led cuts in June with 7,408, has announced 16,291 for the year, down 34% from the 24,852 announced through June 2020.
“The Energy sector is undergoing some disruption as demand for renewables gains momentum. The record heat in the Pacific Northwest, the failure of the power grids in Texas, and a New Administration that is pushing to pass infrastructure legislation that includes renewables is further cause,” said Challenger.
Retailers have announced 14,049 cuts so far in 2021, down 91% from the 156,595 cuts announced through June 2020.
Cuts in the Auto Industry
A semiconductor shortage has caused numerous work stoppages for Automakers and suppliers in recent months. Last month, employers in this sector announced 1,062 cuts, for a total of 6,111 cuts this year. That is down 92% from the 74,816 cuts announced during the same period last year.
Top Reasons for Layoffs
The majority of cuts (10,876) last month were attributed to Restructuring, while 2,950 were from plant and store closings. Cuts attributable to COVID-19 fell to 186 in June from 686 in May. So far this year, employers used this reason for 7,797 cuts, compared to 1,011,387 announced in the first half of 2020.
Job Losses in the News & Media Industry
Challenger continues to follow losses in the News industry, which is tracked as a subset of Media cuts. Through June, Newsrooms have announced 1,009 job cuts, with 46 occurring in June. That is down 91% from the 11,027 cuts through the first half of last year. These cuts include digital, print, and broadcast news.
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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
