2019 Year-End Job Cuts Report: Fewest Monthly Cuts Since July 2018, YOY Up 10%
Job cuts announced by U.S.-based employers fell for the second consecutive month, to 32,843, the lowest monthly total since 27,122 cuts were announced in July 2018, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Last month’s total is 26.3% lower than the 44,569 cuts announced in November and 25.2% lower than the 43,884 announced in the same month last year.
Employers announced plans to cut 592,556 jobs from their payrolls in 2019, 10% higher than the 538,695 cuts announced in 2018. It is the highest annual total since 2015, when 598,510 cuts were announced. 2019 was the fourth-highest year for job cut announcements this decade.
Year Annual Total
Source: Challenger, Gray & Christmas, Inc. ©
“Confidence was high heading into the last month of the year. With some resolutions occurring in the trade war and strong consumer spending in the fourth quarter, companies appear to be taking a wait-and-see approach as we head into 2020,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
Of the 592,556 cuts announced last year, 127,687 were in the fourth quarter, the lowest quarterly total since 120,879 cuts were announced in Q3 2018. It is 4.6% lower than the prior quarter’s total of 133,882 and 26% lower than the same quarter in 2018, when 172,601 cuts were announced. It is the lowest fourth-quarter total since 2017, when 97,292 cuts were announced.
Retail led all sectors in 2019 with 77,475 job cuts, 21% lower than the 98,563 cuts announced in 2018. 48,753 of those cuts were due to bankruptcies. Industrial Goods manufacturers followed with 70,894 cuts, 156% higher than the 27,644 announced in 2018. It was the highest total for this sector since 2009, when 125,423 cuts were announced.
The Automotive industry also saw its highest number of job cut announcements since 2009, when 174,192 cuts were tracked. Companies in this sector cut 50,776 jobs in 2019, up 66% from the 30,587 announced last year.
Technology companies announced 64,166 job cuts in 2019, up 351% from the 14,230 announced the previous year.
“The sectors with the highest number of cuts this year were all dealing with trade concerns, emerging technologies, and shifts in consumer behavior. We tracked a lot of hiring activity in these industries as well as cuts,” said Challenger.
In fact, Retailers announced 886,515 hiring plans this year, 789,781 of which were seasonal. Automakers and suppliers announced over 28,000 new jobs, while Technology companies announced over 21,000, according to Challenger tracking.
Companies cited restructuring for most job cuts: 137,968, while another 130,728 were due to company or unit closings. Trade difficulties were cited as the reason for 11,688 job cuts, while tariffs accounted for 5,881.
Bankruptcy was another leading cause of job cuts. In 2019, 62,136 announced cuts were due to bankruptcy, or 10.5% of all cuts, primarily from Retailers. That is the highest total for that reason since 2005, when 74,238 cuts were due to bankruptcies. Bankruptcy accounted for 6.9% of all cuts that year.
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When unemployment is at a 50-yr low, you expect employers will have to start paying more. There is evidence that they are running into labor shortages, but wages have been really slow to climb.-@AndyChallengeHR talks #layoffs & the #economy @BNNBloomberg. https://t.co/h3g4TF0lzs
— ChallengerGray (@ChallengerGray) January 10, 2020