Challenger March 2022 Job Cuts Report

 

Published March 31, 2022

March Cuts Up 40% Over February

U.S.-based employers announced 21,387 cuts in March, up 40.3% from the 15,245 cuts announced in February. It is the highest monthly total since October 2021, when 22,822 cuts were announced, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

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Source: Challenger, Gray & Christmas, Inc. ©

March’s total is 30% lower than the 30,603 cuts announced in the same month last year. In the first quarter of 2022, employers announced 55,696 cuts, down 62% from the 144,686 cuts announced through the same period in 2021. It is the lowest quarterly total since the third quarter of 2021, when 52,560 cuts were recorded. 

Challenger Analysis

“There appears to be a return of a healthier churn in the labor market,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

“Some U.S. Employers report hiring is getting easier, particularly with the incentives many companies put in place to attract and retain talent. Meanwhile, inflation impacts and war concerns are causing workers who were depending on savings or investments to seek out paid employment,” he added.

Meanwhile, the latest Job Openings and Labor Turnover Survey (JOLTS) showed the number of hires increased by 263,000 in February, while quits hovered near record-high at 2.9%.

Reasons for Cuts and Top Industries

Most (5,301) cuts in March were due to store, unit, or plant closing. Another 3,278 cuts were due to vaccine refusal, bringing the total number of cuts for this reason to 18,099 since June 2021. Of those, 14,422 were recorded in 2022.

For the fourth consecutive month, Health Care/Products, which includes hospitals, health care products manufacturers, and other care-related entities, announced the most job cuts with 4,995. For the year, companies in this sector have announced 13,923, up 161% from the 5,333 announced through the same period last year. 

Financial services announced the second-most job cuts this year with 5,903, followed by the Services sector with 4,965. Warehousing companies announced 4,531 cuts in 2022.

Hiring Announcements

Employers in the United States announced 105,224 hiring plans in March. The Government announced the highest number of hiring plans with 17,337, followed by Retail with 16,166. Food manufacturers and suppliers announced plans to hire 15,490 last month.

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But not many workers are losing their jobs, according to Andy Challenger, senior vice president at outplacement firm Challenger, Gray & Christmas.
“Layoffs are at historic lows. Near-record highs in job openings across the country. Employers are hanging on to their employees at any cost,” Challenger said.
The costs include hiking wages and offering show-up-for-your-first-day-of-work bonuses — especially for high-demand service jobs.
“There’s just intense competition for those workers willing to come in and work in-person jobs, and so companies are poaching them back and forth from each other,” he said.
Nearly 2 million people were working before the pandemic who aren’t now. That includes a lot of parents, especially mothers of young children.

 

 


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Labor-Strapped Employers Being Forced to Drop Some Job Requirements

Start by telling us just hiring challenges that employers are facing and how competitive this job market still is right now.
Andy Challenger: The labor market remains abnormal. We remain in a labor shortage when we talk to companies and HR leaders that are in charge of hiring. They are still scrambling to try to get candidates in the door, get people hired. We just did a survey last week That should 81% of employers are having a hard time filling roles. 41% / 42% of them said they’re having a hard time filling in-person jobs in particular. So it remains a really tight market with quits rates near an all time high job openings in an all time high. Still definitely a candidate’s market.

Cheddar News interview with Andy Challenger on Labor Shortage

Which industries need to be more hires and how are they adjusting the hiring requirements to encourage a new applicants?
Andy Challenger: We see the most openings in areas of the economy clearly like restaurants, hotels, food, accommodation. Those areas where in person rolls are really kind of the bread and butter job. That is a very difficult position to fill in this environment. We’re still missing ~123 million people from the labor market, not everybody’s returned to working and because of that it makes hiring very difficult. At the higher end we’re seeing a lot of openings in healthcare. Healthcare workers are burned out; quitting the industry altogether. So you see a lot of competition amongst hospitals and healthcare organizations to try to lure people in. But not far behind that. We see professional and business services, that’s kind of a broad category. But generally corporate jobs, like lawyers, accountants, HR professionals, people that can go across lots of different industries but have a defined skill set are in super high demand.
We see companies doing all sorts of things to try to attract them. Yes, they’re raising wages and increasing benefits, but they’re also in some cases lowering qualifications. The years of experience you might need to get into one of those roles is coming down a bit because companies are just scrambling to get people in the door.

Watch the full interview below.

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