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posted on 03 September 2015

August 2015 Job Cuts Drop After July Surge

from Challenger Gray and Christmas

Monthly job cuts plunged by more than 60 percent in August after surging to a four-year high in July on massive cuts in military staffing.

Employers in the U.S. announced plans to shed 41,186 workers from payrolls last month, a 61 percent decline from the 105,696 layoffs in July. The July figure was the highest since September 2011, when monthly job cuts reached 115,730.

The August total was 2.9 percent higher than the same month a year ago, when 40,010 planned job cuts were announced. This marks the seventh month this year that the job-cut total was higher than the comparable month from 2014.

TOP FIVE INDUSTRIES

Year To Date

2015

2014

Energy

71,628

8,052

Government

67,917

16,887

Retail

57,363

30,109

Industrial Goods

36,872

17,856

Computer

26,374

48,928

MONTH BY MONTH TOTALS

2015

2014

January

53,041

45,107

February

50,579

41,835

March

36,594

34,399

April

61,582

40,298

May

41,034

52,961

June

44,842

31,434

July

105,696

46,887

August

41,186

40,010

September

30,477

October

51,183

November

35,940

December

32,640

TOTAL

434,554

483,171

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

To date, employers have announced 434,554 job cuts in 2015. That is up 31 percent from the 332,931 planned layoffs in the first eight months of 2014. With monthly totals averaging 54,319, 2015 job cuts are on track to exceed 650,000 for the year, which would be the highest year-end tally since 2009 (1,272,030).

The retail sector saw the heaviest job cutting in August, with 9,601 planned layoffs reported during the month. Most of those were related to bankruptcy of east coast supermarket chain A&P, which is closing more than 100 stores and laying off a reported 8,500 workers by Thanksgiving.

The retail sector has announced 57,363 job cuts so far this year, which is a 90 percent increase over the 30,109 job cuts announced by this point in 2014. Said John A. Challenger, chief executive officer of Challenger, Gray & Christmas:

"Overall, retail is relatively healthy, but we have seen some big layoffs this year, particularly from long-time players that simply have not been able to keep up with changing consumer trends. These retailers somehow manage to survive, but only through multiple bankruptcies, such as A&P. Earlier this year RadioShack announced 5,400 job cuts,"

"Going forward, the recent volatility in the stock market may have a negative impact on retail sales, as investors who took a hit curtail spending. However, retailers may be reluctant to shed too many workers as we head into the holiday season. Overall, we have not seen any job cuts attributed to the stock market's swoon. We are more likely to see cuts resulting from the underlying cause of the volatility, which is the weakening economy in China and other developing nations," said Challenger.

The industrial goods sector saw the second heaviest downsizing activity in August, announcing 7,949 layoffs during the month. That is the largest number of job cuts for this sector since March, when 9,163 job cuts were announced.

About 22 percent of the industrial goods cuts were related to the recent drop in oil prices. In all, 3,808 job cuts were attributed to oil prices last month, which is down 57 percent from 8,878 oil-related job cuts in July.

Since the beginning of the year, oil prices have been blamed for 82,268 layoffs, mostly in the energy sector, but also among industrial goods manufacturers that supply equipment and materials for oil exploration and extraction. Concludes Challenger:

The stream of job cuts related to oil prices appears to be ebbing. The majority of these cuts came in the first four months of 2015, when we saw more than 68,000 layoffs related to oil. Since May, fewer than 14,000 job cuts have been attributed to oil prices.

It is too soon to say if we have seen the last of the big oil cuts. As we head into the final months of 2015, there are definitely some red flags that suggest we may see more layoffs from the energy sector, as well as in other areas of the economy. The problems that China is facing could send shockwaves throughout the global economy, including the United States.

The last quarter of the year is also when we tend to see companies make workforce and operational adjustments in order to meet year-end earnings goals.

LAYOFF LOCATION

Year To Date

Texas

86,276

Dist. of Columbia

58,225

California

31,813

Minnesota

27,060

New York

26,156

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

JOB CUTS BY INDUSTRY

14-Aug

15-Jul

15-Aug

Jan-Aug 2014

Jan-Aug 2015

Aerospace/Defense

1,140

929

526

13,816

8,141

Apparel

1,517

959

Automotive

725

423

1,528

6,480

8,777

Chemical

137

1,514

15,823

Commodities

1,274

503

Computer

567

13,924

832

48,928

26,374

Construction

268

824

589

Consumer Products

243

1,179

1,589

7,887

10,564

Education

515

1,889

2,367

12,555

16,657

Electronics

7,350

4,967

700

16,406

9,412

Energy

2,734

9,050

2,078

8,052

71,628

Entertainment/Leisure

3,044

243

531

18,806

9,606

Financial

974

3,107

461

24,032

20,045

Food

1,857

1,599

3,303

13,767

15,403

Government

2,180

57,531

492

16,887

67,917

Health Care/Products

3,475

1,568

3,101

26,520

19,128

Industrial Goods

3,782

2,382

7,949

17,856

36,872

Insurance

450

15

450

1,839

3,337

Legal

557

1,172

Media

1,119

298

135

4,478

3,100

Non-Profit

96

217

1,129

1,829

1,740

Pharmaceutical

3,093

93

298

9,358

6,632

Real Estate

253

407

Retail

1,063

2,532

9,601

30,109

57,363

Services

4,096

925

1,511

10,269

5,580

Telecommunications

844

100

1,100

14,754

3,727

Transportation

663

2,320

1,505

20,812

12,209

Utility

1,552

889

TOTAL

40,010

105,696

41,186

332,931

434,554

JOB CUTS BY REGION, STATE

EAST

AUGUST

Y-T-D

Dist. of Columbia

58,225

New York

561

26,156

New Jersey

10,191

22,516

Pennsylvania

567

16,154

Delaware

9,294

Massachusetts

330

7,334

Connecticut

275

3,680

Maryland

2,376

Vermont

330

1,009

Maine

360

836

New Hampshire

112

388

Rhode Island

167

TOTAL

12,726

148,135

MIDWEST

AUGUST

Y-T-D

Minnesota

458

27,060

Illinois

7,266

21,093

Ohio

600

12,876

Wisconsin

557

8,442

Michigan

272

7,043

Iowa

531

4,344

Indiana

750

3,837

Missouri

300

3,142

Nebraska

1,570

2,208

Kansas

1,543

TOTAL

12,304

91,588

​JOB CUTS BY REGION, STATE

WEST

AUGUST

Y-T-D

Texas

4,365

86,276

California

440

31,813

Washington

82

10,983

Colorado

1,331

4,468

Oklahoma

3,936

Arizona

2,342

3,687

Utah

70

2,031

Oregon

1,720

South Dakota

1,292

Hawaii

100

733

Alaska

665

Nevada

79

532

Wyoming

450

Idaho

289

Montana

119

235

North Dakota

34

170

New Mexico

103

TOTAL

8,962

149,383

SOUTH

AUGUST

Y-T-D

Florida

2,302

10,807

Virginia

883

7,910

N. Carolina

787

6,117

Alabama

1,201

4,918

Louisiana

1,659

3,481

Arkansas

91

2,904

West Virginia

2,629

Georgia

2,334

Tennessee

1,737

S. Carolina

30

1,305

Kentucky

91

954

Mississippi

150

352

TOTAL

7,194

45,448

JOB CUTS BY REASON

August

YTD

Restructuring

10,283

114,755

Cost-Cutting

5,088

89,550

Oil Prices

3,808

82,268

Closing

6,944

68,809

Merger/Acquisition

3,100

21,278

Demand Downturn

17,567

Bankruptcy

8500

14,653

Loss of Contract

1372

8,756

Outsourcing

1230

3,530

Financial Losses

2,428

Economic Conditions

2,363

Relocation

2,288

Competition

650

1,991

Listeria

1,490

Legal Trouble

1,416

Voluntary Severance

490

Bird Flu

382

Copper Prices

211

211

Government Regulation

155

Technological Update

150

Fire

24

TOTAL

41,186

434,554

Copyright 2015 Challenger, Gray & Christmas, Inc.


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