Published June 1, 2023
U.S.-based employers announced 80,089 cuts in May, a 20% increase from the 66,995 cuts announced one month prior. It is 287% higher than the 20,712 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.
So far this year, companies have announced plans to cut 417,500 jobs, a 315% increase from the 100,694 cuts announced in the same period last year. It is the highest January-May total since 2020, when 1,414,828 cuts were recorded. With the exception of 2020, it is the highest total in the first five months of the year since 2009, when 822,282 cuts were tracked through May.
Related: Employers Announce Nearly 1 Million Cuts Due to COVID-19
“Consumer confidence is down to a six-month low and job openings are flattening. Companies appear to be putting the brakes on hiring in anticipation of a slowdown,” said Andrew Challenger, labor expert and Senior Vice President of Challenger, Gray & Christmas, Inc.
Source: Challenger, Gray & Christmas, Inc. ©
Which Industries Are Cutting?
With the exception of Education, Government, Industrial Manufacturing, and Utilities, every industry has seen an increase in layoffs this year. The Technology sector announced the most cuts in May with 22,887, for a total of 136,831 this year, up 2,939% from the 4,503 cuts announced in the same period last year. The Tech sector has now announced the most cuts for the sector since 2001, when 168,395 cuts were announced for the entire year.
Source: Challenger, Gray & Christmas, Inc. ©
Retailers announced the second-most cuts in May with 9,053. Retail has announced 45,168 cuts so far this year, up 942% from the 4,335 announced through May 2022. The Automotive sector announced 8,308 job cuts last month for a total of 18,017 this year, a 235% increase from the 5,380 cuts announced in the same period last year. Financial firms have announced 36,937 cuts through May, up 320% from the 8,788 cuts through the same period in 2022. Health Care/Products, which includes health products manufacturers and hospitals, announced 33,085 cuts, up 81% from the 18,301 announced in the sector in the first five months of last year.
Media & News Cuts
The Media industry has announced 17,436 cuts so far in 2023, the highest year-to-date (YTD) on record. The second-highest YTD for the sector occurred in 2020, when 16,750 cuts were announced through May. After 2020, the next highest YTD occurred in 2001, when 15,984 Media cuts were announced in the first five months of the year. News, which Challenger tracks as a subset of Media and includes broadcast, digital, and print, has announced 1,972 cuts so far this year, surpassing the 1,808 announced in all of 2022.
May Hiring Plans
In May, employers announced plans to hire 7,884 workers, the lowest monthly total since November 2020, when 6,527 new positions were announced. So far this year, companies have announced plans to add 101,833 positions, down 83% from the 612,686 hires announced through May 2022.
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Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
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Looking to the past may be a good starting point when looking at the future of technology in the 21st Century after a report by Challenger, Gray, and Christmas, Inc. found nearly 4,000 jobs cuts last month were replaced by AI. The fears of continued AI advancements are real and the effect it is having on workers’ livelihoods cannot be understated, but if the past shows anything, humans are resilient and capable of adapting.
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More than 80,000 jobs were cut in May, according to the analytics firm Challenger, Gray, and Christmas, which cited market and economic conditions as well as mergers and acquisitions as key factors.
But some 3,900 of those jobs were lost because of AI, the firm said.
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Though the financial sector hasn’t seen layoffs at the same scale as tech or retail, a report from Challenger, Gray & Christmas Inc., an executive coaching firm, shows that the industry has cut nearly 37,000 jobs in the US so far this year, a figure up 320% from the same period last year. Goldman Sachs Group Inc. is working on what would be the third round of layoffs in less than a year as deal-making remains sluggish. Morgan Stanley has embarked on its second round of cuts in less than six months.
Despite these high-profile layoffs, Andy Challenger, senior vice president at Challenger, says the picture for job-hunting banking professionals isn’t as dire as it might seem. US employers added some 339,000 jobs in May, a payroll boom that far outstripped expectations and reinforced the perception that workers’ economic position remains relatively strong.
“When we look at the overall labor market, and we look at finance, unemployment remains really low, historically low,” Challenger said. “There still are job opportunities available and companies are still hiring. So it’s not an awful job market to go out and look in.”
What would be more difficult would be to find another job in the sector that has a more flexible schedule, Challenger said, as many of the big financial firms change work-from-home policies in lockstep. Still, more than two-thirds of banks offer either full flexibility or a structured hybrid arrangement, according to a survey by Scoop Technologies Inc., a firm that helps companies coordinate hybrid teams.
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Labour markets across developed economies remain tight, but jobs cuts are rising.
According to global #outplacement firm Challenger, Gray & Christmas, job cuts announced by U.S.-based employers rose 20% to 80,089 in May.
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