2013 Challenger Job Cuts Fall 3% Over 2012

January 9th, 2014
in econ_news, syndication

EMPLOYERS SHED 30,623 WORKERS IN FINAL MONTH OF 2013

from Challenger, Gray & Christmas, Inc.

Announced job cuts fell to the lowest level of the year in December as U.S.-based employers reported plans to reduce payrolls by 30,623 during the month. That was down 32 percent from a November total of 45,314. For the year, job cuts were down about 3.0 percent from 2012.

The December total was six percent lower than the 32,556 job cuts announced in the same month a year earlier, marking the third consecutive year-over-year decline. Last month was not only the lowest job-cut month in 2013; it was, in fact, the lowest job-cut month in more than 13 years. The last time employers announced fewer job cuts was June, 2000, when 17,241 planned layoffs were recorded.

Follow up:


Overall, employers announced a total of 509,051 planned job cuts in 2013, down 3.0 percent from 523,362 in 2012. It is the lowest annual job-cut total since 434,350 cuts were announced in 1997. The fourth quarter of the year saw a slight increase in October job cuts, followed by consecutive declines in monthly job cuts to close out 2013. In all, 121,667 job cuts were announced over the final three months of the year, which was 5.3 percent lower than the previous quarter (128,452) and 11 percent lower than the fourth quarter of 2012 (137,361). John A. Challenger, chief executive officer stated:

“Employers seem less and less inclined to make dramatic staffing decisions in the final month of the year. We have had several years, when it was among the largest job-cut months of the year, if not the largest. Over the last five years, however, December job cuts have come in well below the annual average. It was the lowest job-cut total this year and the second lowest a year ago. It could be the spirit of the holiday season that is prompting employers to hold off on announcing layoff plans, but it is more likely to be the result of increased confidence heading into each new year. The recovery has been slow, but every year since the recession has been better than the previous one.

While overall job cuts were 3.0 percent lower than a year ago, four of the top five job-cutting industries experienced significant increases in downsizing last year. The financial sector led all other industries with 60,962 job cuts, up 49 percent from 41,008 in 2012. The second-ranked health care sector announced 52,638 job cuts in 2013, which is 45 percent more than the 36,212 a year earlier. Job cuts announced within the industrial goods nearly doubled from 26,103 in 2012 to 51,864.

Due to the heavy downsizing in the financial sector, New York-based firms announced the most job cuts in 2013 with 82,952. California ranked a distant second with 59,535. Illinois-based companies cut 43,431 jobs last year, up 66 percent from 2012, when employers in the state announced layoff plans impacting 26,163 workers both inside and beyond its borders. Noted Challenger:

“The heavy job-cutting industries were impacted by several factors in 2013, most of which were unrelated to the health of the economic recovery. In fact, in the case of the financial sector, the ongoing recovery was, ironically, a contributing factor to increased layoffs, as these institutions shed the thousands of extra workers brought on to handle foreclosures as well as the refinancing of troubled mortgages. As the economy improved, the number of foreclosures and troubled mortgages decline. At the same time, mortgage rates and home prices increased, which lowered demand for mortgage bankers.

“Likewise, job cuts in the health care sector were not driven by lower demand. Indeed, demand for health care is on the rise. However, cuts in Medicare reimbursements and Medicaid funding forced hospitals and other health care providers to adjust their staffing levels, as that source of income declines.”

“Despite the rise in job cuts, health care workers remain highly sought-after. In fact, the Bureau of Labor Statistics recently noted that health care will account for about one in every three jobs created over the next ten years,” he added.

Occupations in the health care sector that are expected to see strong hiring include physician’s assistants; nurses, particularly those in specialty areas, such as oncology; physical therapists; and medical technicians. There will also be high demand for researchers, engineers, designers, chemists and other high-skill areas in bio-technology, medical equipment manufacturing and pharmaceuticals, according to Challenger.

Another area poised for strong growth in 2014 is technology. While the computer industry saw the fifth highest number of job cuts last year, the pace of downsizing in the sector was actually down 24 percent from 2012. The industry ranked third in terms of hiring announcements, with firms announcing plans to add more than 26,000 workers. Said Challenger:

“Our hiring total represents a tiny fraction of the actual job creation, since most employers do not formally announce hiring plans. Computer science, information technology, electronics manufacturing and telecommunications will continue to be strong job generators in the 2014 economy. New companies are forming and existing companies are expanding products and services related to Big Data, cloud computing, and security, particularly in the wake of the massive security breach at Target.

“The coming year will hopefully see improved conditions for small and medium sized businesses that have struggled so far in this economy. Big businesses, on the other hand, have done rather well, regardless of the industry. Globalization has really driven the growth for multi-national conglomerates. The benefits are trickling down in several ways. These firms require large staffs to conduct market research, product R&D, sales and marketing. They need accountants and administrators and myriad of support staff. Their growth is also benefiting ancillary industries, such as management consulting, staffing, information technology, etc. These employers will continue to seek new workers in 2014 and beyond.

“One area that may be off many job seekers’ radar is anything related to skilled trades, such as electrical maintenance, plumbing, carpentry, masonry, automotive maintenance, etc. It may be difficult for many to enter these careers from less technical areas, but for students and other young people thinking about future job opportunities, these fields will be fruitful in the coming years, as the existing workforce continues to age and retire. These are jobs that will always be in demand and that cannot be outsourced overseas.

 

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

 

TOP FIVE INDUSTRIES

Year To Date

 

2013

2012

Financial

60,962

41,008

Health Care/Products

52,637

36,212

Industrial Goods

51,864

26,103

Retail

49,299

32,868

Computer

35,136

46,164

 

MONTH BY MONTH TOTALS

 

 

2013

2012

January

40,430

53,486

February

55,356

51,728

March

49,255

37,880

April

38,121

40,559

May

36,398

61,887

June

39,372

37,551

July

37,701

36,855

August

50,462

32,239

September

40,289

33,816

October

45,730

47,724

November

45,314

57,081

December

30,623

32,556

TOTAL

509,051

523,362

 

Some reductions are identified by employees as workers who will take early retirement offers or other special considerations to leave the company.

LAYOFF LOCATION

Year To Date

New York

 

82,952

California

 

59,535

Illinois

 

43,431

Texas

 

32,327

Pennsylvania

 

25,193

 

 

Listings are identified by the location of the layoff or corporate headquarters as stated in announcement.

 

JOB CUTS BY INDUSTRY

 

 

12-Dec

13-Nov

13-Dec

Jan-Dec 2013

Jan-Dec 2012

Aerospace/Defense

803

4,174

1,091

34,941

19,026

Apparel

150

121

 

3,091

2,781

Automotive

757

421

1,259

13,497

24,092

Chemical

239

130

1,015

3,530

7,198

Commodities

 

884

 

3,372

1,399

Computer

1,104

714

5,578

35,136

46,164

Construction

599

 

125

1,772

3,556

Consumer Products

1,610

573

1,913

13,451

34,133

Education

475

716

165

18,808

30,925

Electronics

400

522

629

8,830

15,191

Energy

1,812

1,701

689

17,750

26,813

Entertainment/Leisure

601

1,165

1,079

14,342

13,906

Financial

11,355

1,598

1,773

60,962

41,008

Food

270

4,160

1,508

18,235

37,033

Government

1,550

759

1,263

13,027

19,128

Health Care/Products

1,960

2,590

2,145

52,637

36,212

Industrial Goods

1,222

2,732

2,470

51,864

26,103

Insurance

 

180

55

6,519

8,355

Legal

80

45

 

776

1,011

Media

266

2,049

274

13,773

5,641

Non-Profit

39

28

200

3,621

1,659

Pharmaceutical

1,264

1,727

927

22,161

14,150

Real Estate

 

68

 

709

325

Retail

22

9,998

2,269

49,299

32,868

Services

58

1,961

1,289

10,987

7,810

Telecommunications

921

374

1,540

12,952

21,858

Transportation

4,844

5,901

1,202

20,515

42,107

Utility

155

23

165

2,494

2,910

TOTAL

32,556

45,314

30,623

509,051

523,362

 

JOB CUTS BY REGION, STATE

 

EAST

DECEMBER

Y-T-D

New York

4,743

82,952

Pennsylvania

952

25,193

New Jersey

1,219

23,034

Massachusetts

395

12,408

Connecticut

599

10,696

Maryland

372

9,751

Dist. of Columbia

1,340

4,421

Maine

455

2,157

Delaware

 

1,917

New Hampshire

80

1,686

Rhode Island

 

814

Vermont

23

593

TOTAL

10,178

175,622

MIDWEST

DECEMBER

Y-T-D

Illinois

718

43,431

Ohio

1,122

19,766

Michigan

2,134

12,285

Missouri

165

11,308

Indiana

5

8,170

Wisconsin

256

7,810

Minnesota

425

6,273

Kansas

125

3,388

Iowa

554

1,389

Nebraska

 

550

TOTAL

5,504

114,370

 

JOB CUTS BY REGION, STATE

 

WEST

DECEMBER

Y-T-D

California

6,700

59,535

Texas

1,373

32,327

Washington

251

10,689

Colorado

340

8,804

Oklahoma

70

4,058

Oregon

30

3,562

Arizona

 

2,957

Idaho

352

2,656

Hawaii

163

1,499

Nevada

 

1,436

South Dakota

 

1,192

Utah

 

1,043

New Mexico

 

775

Montana

 

394

North Dakota

 

389

Alaska

27

285

Wyoming

 

195

TOTAL

9,306

131,796

SOUTH

DECEMBER

Y-T-D

Florida

2,183

21,509

N. Carolina

509

15,506

Virginia

1,420

11,168

Georgia

 

9,605

Tennessee

190

6,473

S. Carolina

225

5,186

Louisiana

591

4,064

Alabama

 

3,906

Mississippi

340

3,776

Kentucky

177

2,969

Arkansas

 

1,719

West Virginia

 

1,382

TOTAL

5,635

87,263

 

 

 

DECEMBER

YTD

Restructuring

7,568

173,926

Closing

10,290

117,386

Cost-Cutting

9,054

83,305

Demand Downturn

191

27,813

Sequestration

2

16,934

Economic Conditions

1,134

16,328

Merger/Acquisition

684

16,313

Loss of Contract

140

10,947

Voluntary Severance

 

6,034

Outsourcing

200

5,332

Falling Sales

 

5,280

Bankruptcy

490

5,043

Relocation

429

4,376

Legal Trouble

 

4,334

Health Reform

371

3,896

Federal Spending Cuts

 

2,500

Competition

40

2,410

Natural Disaster

30

2,082

Labor Dispute

 

1,000

Rising Costs

 

868

Order Cancellation/Reduction

 

846

Government Regulation

 

566

Work Stoppage

 

400

Reorganization/Consolidation

 

359

Drought

 

221

Government Drawdown in Iraq

 

215

Funding Loss

 

180

Technological Update

 

149

Firing

 

8

TOTAL

30,623

509,051

 

QUARTER-BY-QUARTER

 

 

Q1

Q2

Q3

Q4

TOTAL

1989

9,850

10,100

24,085

67,250

111,285

1990

107,052

87,686

49,104

72,205

316,047

1991

110,056

76,622

147,507

221,107

555,292

1992*

110,815

85,486

151,849

151,850

500,000

1993

170,615

84,263

194,486

165,822

615,186

1994

192,572

107,421

117,706

98,370

516,069

1995

97,716

114,583

89,718

137,865

439,882

1996

168,695

101,818

91,784

114,850

477,147

1997

134,257

51,309

95,930

152,854

434,350

1998

139,140

131,303

161,013

246,339

677,795

1999

210,521

173,027

173,181

118,403

675,132

2000

141,853

81,568

168,875

221,664

613,960

2001

406,806

370,556

594,326

585,188

1,956,876

2002

478,905

292,393

269,090

426,435

1,466,823

2003

355,795

274,737

241,548

364,346

1,236,426

2004

262,840

209,895

251,585

315,415

1,039,735

2005

287,134

251,140

245,378

288,402

1,072,054

2006

255,878

180,580

202,771

200,593

839,822

2007

195,986

197,513

194,095

180,670

768,264

2008

200,656

275,292

287,142

460,903

1,223,993

2009

578,510

318,165

240,233

151,122

1,288,030

2010

181,183

116,494

113,595

118,701

529,973

2011

130,749

115,057

233,258

127,018

606,082

2012

143,094

139,997

102,910

137,361

523,362

2013

145,041

113,891

128,452

121,667

509,051

AVG

208,629

158,436

182,785

212,303

 

*Estimate based on half-year total. Challenger began tracking job-cut data in 1993.  Before that, it was tabulated by an independent newsletter no longer published.

 

ANNOUNCED HIRING PLANS

Monthly Totals

 

 

2013

2012

2011

January

60,585

7,568

29,492

February

92,372

10,720

72,581

March

8,115

12,390

10,869

April

9,322

11,794

59,648

May

9,618

7,722

10,248

June

8,774

12,314

15,498

July

9,728

10,350

10,706

August

7,662

12,079

15,201

September

445,617

425,683

76,551

October

87,874

75,065

159,177

November

14,177

28,526

63,527

December

11,362

16,266

14,074

TOTAL

765,206

630,477

459,971

 

 

ANNOUNCED HIRING PLANS

 

INDUSTRY

DECEMBER

YEAR-TO-DATE

Retail

 

588,337

Transportation

 

76,397

Computer

10,200

26,026

Automotive

 

15,597

Health Care/Products

716

8,830

Industrial Goods

 

7,389

Aerospace/Defense

 

4,781

Financial

91

4,502

Food

131

4,328

Education

 

4,322

Government

 

4,217

Telecommunications

 

3,770

Entertainment/Leisure

 

3,285

Consumer Products

 

2,331

Insurance

 

2,322

Energy

170

1,878

Construction

 

1,775

Electronics

 

1,461

Services

 

1,270

Pharmaceutical

 

1,120

Apparel

 

550

Chemical

50

410

Media

4

187

Utility

 

100

Non-Profit

 

11

Legal

 

10

Commodities

 

0

Real Estate

 

0

TOTAL

11,362

765,206
















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