Job Cuts Rise 15% in March, Up 319% from Same Month Last Year, Highest Q1 Since 2020
Published April 6, 2023
U.S.-based employers announced 89,703 cuts in March, up 15% from the 77,770 announced in February. It is up 319% from the 21,387 cuts announced in the same month in 2022, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
March’s total marks the third time this year when cuts were higher than the corresponding month a year earlier.
Employers announced 270,416 cuts in the first quarter, a 396% increase from the 55,696 cuts announced in the same period one year prior. It is the highest first quarter total since 2020, when 346,683 cuts were announced January to March. It is the highest quarterly total since the third quarter of 2020 when 497,215 cuts were recorded.
“We know companies are approaching 2023 with caution, though the economy is still creating jobs. With rate hikes continuing and companies’ reigning in costs, the large-scale layoffs we are seeing will likely continue,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“The Technology sector is leading all industries, and this talent is in demand across industries. In fact, 38% of all cuts are in the Tech sector,” he added.
Industries Cutting The Most Jobs
Indeed, Technology companies have announced 102,391 cuts so far this year, up 38,487% from the 267 cuts the sector announced in the first quarter of 2022. It is already up 5% from the annual total of 97,171 in 2022. It is on pace to surpass the highest annual total for the sector announced in 2001. The only years during which Tech announced more job cuts than the current year are in 2001, when 168,395 cuts were announced, and 2002, when 131,294 Tech cuts were recorded.
Financial companies announced the second-most job cuts this year with 30,635, a 419% increase from the 5,903 cuts announced in the sector in Q1 2022. Health Care/Products companies and manufacturers, including hospitals, announced 22,950 cuts in the first quarter of 2023, up 65% from the 13,923 cuts
announced in the same period last year.
In a possible sign of decreased expectations for consumer spending, Retail announced the fourth-most cuts in 2023 with 21,426, a 1,125% increase from the 1,617 cuts announced in the sector through March 2022.
The Media industry shed 582 cuts last month for a total of 10,320. Of those, 1,438 were in digital, broadcast, and print News.
Why Are Companies Cutting?
The top reason for job cuts so far this year is Market/Economic Conditions with 167,575. Another 24,825 were attributed to Cost-Cutting, while 22,109 were due to store, unit, or department Closings. Financial Loss was the cause of 9,870 and 8,500 jobs were lost due to Restructuring. Demand Downturn was to
blame for 7,944 job cuts this year.
Hiring plans fell to 9,044, the lowest total for March since 2015, when 6,412 new hires were announced. So far this year, US-employers announced plans to hire 70,638, the lowest Q1 total since 2016, when 26,898 new hires were recorded. The most announcements occurred in Entertainment/Leisure with 17,317, down 53% from the 36,932 announced in Q1 last year. Technology follows with 9,323, down 68% from the 28,701 announced hires in the same period last year.
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“Year to date, job cuts are up nearly 400% from the same period a year ago, led by layoffs in the tech sector, according to a recent report by outplacement firm Challenger, Gray & Christmas.
As those layoffs mount, job openings have also begun to fall. Available positions in February declined to below 10 million for the first time since May 2021, according to data from the U.S. Department of Labor.
“We know companies are approaching 2023 with caution, though the economy is still creating jobs,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas.”
So far this year, according to a report from outplacement firm Challenger, Gray & Christmas, there have been over 270,000 job cuts, which is a 396% increase from the same period a year ago.
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