In the penultimate month of the year, U.S.-based employers announced 64,797 job cuts, the second-lowest monthly total for 2020. It is 19.7% lower than the 80,666 job cuts announced in October, according to a report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
November’s total is 45.4% higher than the 44,569 cuts announced in November of last year. So far this year, 2,227,725 job cuts have been announced, 298% higher than the 559,713 cuts announced through November 2019. It is the highest annual total on record.
“News of a coming vaccine and clarity surrounding election results have sent markets soaring and given companies some stability as we end the year,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“That said, disposable income decreased over $130 billion in October, according to the Bureau of Economic Analysis. Undoubtedly, the millions of Americans who remain out of work will have an impact on spending, which will lead to further cuts,” he added.
Where is the cutting?
The majority of cuts last month came from Entertainment/Leisure companies, which announced 11,666 cuts. This sector leads all industries this year with 857,620, up 5,860% from the 14,389 announced in the same period last year.
Technology companies followed with 11,431 cuts, bringing the year-to-date total to 77,826, 22.7% more than the 63,447 cuts announced in the sector last year.
Transportation companies announced the third-highest total for the month with 10,455 cuts, for a total of 170,129 cuts in the first eleven months of 2020. This is a 543% increase from the 26,445 announced in the same period last year.
“Not only are airlines having trouble with decreased travelers, but local transportation authorities are feeling the loss of ridership this year,” said Challenger.
The only industries that have announced fewer job cuts than during the same period last year are Chemical, Financial, Pharmaceutical, and Utility.
Why are companies cutting?
Market Conditions were cited as the reason for 20,021 cuts in November, the highest number for any reason. Demand Downturn followed with 17,659. Restructuring resulted in 11,676 cuts. COVID impacted 5,873 jobs in November, but leads all reasons in 2020 with 1,105,599.
Companies have announced 185,504 hiring plans in November, bringing the year-to-date total to 3,113,595. Of those, 795,350 are seasonal hiring plans for the holidays. These hiring plans are down from last year when employers announced 813,781 seasonal hiring plans.
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