posted on 05 February 2015
Job Cuts Surge as Oil Prices Fall. Employers Shed 53,041 Jobs in January 2015 - 40% Due to Oil Prices
from Challenger Gray and Christmas
Job cut announcements surged to their highest level in nearly two years, as falling oil prices prompted cost-cutting efforts in energy and related industries. In all, U.S.-based employers announced plans to shed 53,041 jobs from their payrolls to start 2015; with 40 percent of those directly related to oil prices.
The January total was up 63 percent from the 32,640 planned layoffs announced in December, according to the report on monthly job cuts released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
Last month's figure was 18 percent higher than the same month a year ago, when employers announced job cuts totaling 45,107. Last month, in fact, saw the highest monthly job-cut tally since February 2013 (55,356) and the highest January total since 2012, when employers announced 53,486 job cuts to begin the new year.
Of the 53,041 job cuts announced in January, 21,322 were directly attributed to the recent and sharp decline in oil prices. Most of these cuts occurred in the energy industry, where employers announced a total of 20,193 layoffs (19,722 of which were directly attributed to oil prices). The January total is 42 percent higher than the 14,262 job cuts announced by the energy industry in all of 2014.
Falling oil prices also contributed to job cuts in the industrial goods manufacturing sector, where companies supplying products and materials to oil drillers were forced to shutter operations. These firms announced 4,859 job cuts in January, of which 1,600 (or 33 percent) were due to oil prices. Said John A. Challenger, chief executive officer of Challenger, Gray & Christmas:
While retailers may ultimately benefit from falling oil prices, the sector did, in fact, post the second largest job cut total in January, behind energy. Employers in the sector announced 6,699, the bulk of which came from the perennially struggling JC Penney and teen fashion retailer Wet Seal.
Despite large layoff announcements from the two companies, retail job cuts were still lower than the same month a year ago, when stores announced 11,394 cuts coming out of the holiday season.
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