The Challenger Report July 2023
Published August 3, 2023
U.S.-based employers announced 23,697 cuts in July a 42% decrease from the 40,709 cuts announced one month prior. It is 8% lower than the 25,810 cuts announced in the same month last year, and marks the first time this year cuts were lower than the corresponding month one year earlier, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
So far this year, employers announced plans to cut 481,906 jobs, a 203% increase from the 159,021 cuts announced in the first seven months of 2022. This is the highest January-July total since 2020, when 1,847,696 cuts were announced through July.
The year-to-date percent change has fallen steadily since April, when cuts were 322% higher than the prior year. In May, they were 315%, and in June, they were 244% higher.
“The job market is remaining resilient in the face of rising interest rates, as consumers continue to spend and inflation falls. Companies, weary of letting go of needed workers, are finding other ways to cut costs. Many have slowed hiring, but wages continue to rise, particularly for the lowest-wage earners, for the moment,” said Andy Challenger, labor expert and Senior Vice President of Challenger, Gray & Christmas, Inc.
Which Industries Are Cutting Workers?
The Technology sector leads all industries in cuts in July and for the year with 4,738 and 146,254 respectively, 30% of all cuts announced in 2023. The year-to-date total is up 1,468% from the 9,327 cuts announced through July 2022. So far, 2023 is the second-highest year for Technology sector cuts, following 2001, when 168,395 cuts were recorded for the entire year.
Health Care/Products, which includes hospitals and medical products manufacturers, announced the second-most cuts in July with 2,668, for a total of 40,947, up 101% from the 20,341 cuts announced through the same period last year.
Despite labor shortages for many Retailers, the sector has announced 586% more cuts this year than through July 2022: 49,493 through July 2023 versus 7,216 through July 2022. In July, Retailers cut 1,281 jobs.
Media companies cut 250 jobs in July for a total of 19,086 this year, a 718% increase from the 2,333 Media cuts during the same period last year. Of those, 2,329 occurred in broadcast, digital, and print News, up 140% from the 971 cuts announced in News through July 2022. Cuts in both Media and News, which Challenger tracks as a subset of Media, are at their highest point since 2020.
Why Are Companies Cutting: Impact of AI
Challenger tracked another 60 job cuts in July due to Artificial Intelligence, as a company announced cuts as it pivots to strengthening AI, occurring in Technology. So far this year, the firm has tracked 3,967 due to this reason.
“AI has the potential to completely disrupt almost every workplace. Those who become familiar with the technology will be incredibly valuable going forward,” said Challenger.
So far this year, most job cuts were attributed to Economic or Market Conditions with 219,972, 46% of all cuts recorded in 2023.
# # #
Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
PUBLISHED August 27, 2023
U.S.-based companies announced 42% fewer job cuts in July than they did in June, Challenger said. July job cuts were also 8% lower than the prior-year period, marking the first time this year that monthly job cuts were lower than in 2022.
On earnings calls over the past year, a new phrase has increasingly emerged from the lips of corporate chiefs: “reassignment.”
That is, employers have been reshuffling teams to adapt to a potential economic downturn or pullback by customers. As a result, some workers are being told that their roles have been eliminated. They aren’t being fired necessarily — but their jobs are in limbo….
“Reassigning is definitely a huge part of the dynamic right now,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas, an outplacement firm.
On Thursday, Challenger, Grey & Christmas releases its August job cuts, which provides information on corporate layoffs. And Friday brings the main event: the official government unemployment numbers for August.