2016 October Job Cut Report: Cuts Fall 31% to 30,740
In the final month before the general election, planned job cuts announced by U.S.-based employers fell to the second lowest level of the year, according to the report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
Employers announced 30,740 job cuts in October, a 31 percent decline from the 44,324 planned layoffs reported in September. Last month’s total was 39 percent lower than a year ago, when announced job cuts totaled 50,504.
The October total was the second lowest of the year, behind the 30,157 job cuts announced in May. It was the lowest October total since 1999, when 22,814 job cuts were announced in the first month of the fourth quarter.
“One might be inclined to speculate that the impending election might be causing employers to hold off on major workforce decisions. However, we did not see similar declines in other election years. Of course, October 2008 marked the start of the Great Recession, with job cuts soaring to nearly 113,000. This low monthly total is most likely due to the fact the economy is relatively healthy and that most employers don’t see those conditions changing in the next three to six months,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
The strength of the economy has kept layoffs down in 2016. To date, employers have announced 466,352 job cuts. That is down 14 percent from the 543,935 cuts announced through October of last year.
“Over the last few years, since the end of the Great Recession, the final two months of the year have seen some of the lowest job cut totals of the year. That was not always the case. From the late 1990s up until the latest recession, the fourth quarter was typically the heaviest in terms of job cuts,” said Challenger.
Indeed, from 1998 through 2008, December job cuts averaged about 101,000. Over the last five years, December job cuts averaged just 32,245. Last year, employers announced just 23,622 layoffs in December, which was the lowest monthly total since 2000.
For the second time in three months, employers in the computer industry saw the heaviest job cuts, announcing 4,792 planned layoffs in October. Computer firms have announced 64,511 job cuts this year, second only to the energy sector, where job cuts total 103,147.
Most of the computer job cuts announced in October came from newly formed HP Inc., which struggled to find its footing in a rapidly changing tech sector. The firm cut another 4,000 jobs last month, adding to the 30,000 job cuts the company announced in 2015.
“Heavier job cuts in the tech sector this year have been more indicative of an industry that is in flux, as opposed to one that is in trouble. That is the nature of technology, so it is not unusual to see workforce volatility. Overall, the tech sector is about as healthy as it gets,” said Challenger.
“Meanwhile, we continue to see layoffs ebb in the energy sector. Over the past three months, these firms have announced just over 8,000 job cuts, including 4,414 in October. In contrast, energy companies announced nearly 50,000 in the first three months of the year,” he added.
“When you look at the layoff data, alongside job creation statistics, it is hard to imagine that the election will come down to the economy. However, this has been one of the most unusual elections in history, so it is impossible to say what the deciding factor will be when people step into the voting booth on Tuesday,” said Challenger.