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posted on 07 January 2016

December 2015 Job Cuts Fall - Fewest Monthly Job Cuts in More than 15 Years.

from Challenger Gray and Christmas

A strong economy, coupled with what appears to be a growing reluctance to announce layoffs during the holidays, contributed to December experiencing the lowest number of monthly job cuts in more than 15 years.

U.S.-based employers announced planned workforce reductions totaling 23,622 in December. That was 24 percent lower than the 30,593 job cuts announced in November and 28 percent below last year's 32,640 December job cuts.

TOP FIVE INDUSTRIES

Year To Date

2015

2014

Energy

94,409

14,262

Government

70,029

22,513

Retail

65,858

43,783

Computer

62,191

59,528

Industrial Goods

57,625

28,273

December was not only the lowest job-cut month of 2015, it was the lowest job-cut month since June 2000, when employers announced 17,241 planned layoffs. Last month also represents the lowest December job-cut total on record, since Challenger began its monthly tracking in 1993.

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

562,510

318,165

240,233

151,122

1,272,030

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

2014

121,341

124,693

117,374

119,763

483,171

2015

140,214

147,458

205,759

105,079

598,510

AVG

202,269

156,780

181,213

204,620

The December decline was significant enough to prevent 2015 job cuts from reaching a six-year high. In all, employers announced 598,510 job cuts during the year, 24 percent more than the 483,171 planned layoffs in 2014.

While 2015 total still saw the heaviest downsizing activity since 2011 (606,082), the year definitely ended with job cuts on the decline. Employers announced 105,072 job cuts in the fourth quarter, down 49 percent from 205,759 in the previous quarter. The fourth quarter total was 12 percent lower than the 119,763 job cuts announced during the same quarter in 2014.

The 105,072 job cuts announced in the final three months of 2015 represents the lowest quarterly total since the third quarter of 2012, when employers cut 102,910 workers from their payrolls. Said John A. Challenger, chief executive officer of Challenger, Gray & Christmas:

It used to be that companies would not hesitate to announce job cuts around the holidays. In fact, the heaviest job-cut period of the year was often in the closing months. However, that appears to have changed in the wake of the Great Recession.

According to Challenger data, the average December job cut total from 2009 through 2015 was 34,046. That is 37 percent lower than an overall monthly average of 53,835 recorded during that period.

Meanwhile, from 2000 through 2008, employers announced an average of 107,056 job cuts in December, which was 13 percent higher than the 94,611 monthly job cuts averaged over that entire period. Challenger concludes:

Companies are more cognizant than ever of their public image, particularly in the era of social media. It's not that job cuts are entirely off limits, but the numbers suggest that employers may be more reluctant to announce large-scale layoffs around the holidays. It could also be that, as more companies measure and revise goals and objectives quarter-to-quarter, the importance of making strategic moves at the end of the year has diminished.

Whatever the reason, the apparent improvement in job security around the end of the year is good news for the nation's workers. In 2015, the December decline may provide little solace for those workers impacted by heavy downsizing through the first half of year.

Workers in the energy sector, as well as those in sectors peripherally related to the exploration and extraction of oil, were significantly impacted by falling oil prices. Of the 287,672 job cuts announced in the first six months of 2015, 69,582 or nearly one-quarter, were blamed on oil prices.

The pace of oil-related job cuts eased in the second half of the year, but they still represented 11 percent of the 310,838 job cuts announced from July through December.

Due in large part to the drop in oil prices, the energy sector saw the heaviest job cutting in 2015, ending the year with 94,409 announced layoffs. That is nearly seven times more than the 14,262 job cuts announced in this industry in 2014.

Large-scale cut backs in the military contributed to a 211 percent increase in government-sector job cuts. The majority of the 70,029 job cuts reported by government agencies in 2015 occurred in July, when the United States Army announced plans to cut 57,000 troops and civilian personnel from its ranks.

In addition to the energy and government sectors, the retail, computer and industrial goods sectors also saw increased job cuts in 2015. However, despite the increased cuts in these areas, the overall outlook for the economy remains positive.

This does not necessarily mean fewer job cuts, though. We are at a point in this economic expansion where we could see a lot volatility as companies make strategic moves to make the most of growth opportunities. That could mean more mergers, more leadership changes and more movement of resources from weak business lines to those with more promise. All of these actions could potentially result in workforce adjustments in 2016 and beyond.

The good news for those impacted by downsizing is that all of this churn should also result in good employment opportunities. Those with the right skills and experience should land quickly, particularly if they employ an aggressive job search strategy.

ANNOUNCED HIRING PLANS

2015

2014

2013

2012

2011

January

8,774

6,312

60,585

7,568

29,492

February

14,574

11,054

92,372

10,720

72,581

March

6,412

6,860

8,115

12,390

10,869

April

13,898

11,145

9,322

11,794

59,648

May

12,598

10,141

9,618

7,722

10,248

June

11,176

15,530

8,774

12,314

15,498

July

11,637

16,544

9,728

10,350

10,706

August

11,778

9,657

7,662

12,079

15,201

September

492,306

567,705

445,617

425,683

76,551

October

86,107

147,935

87,874

75,065

159,177

November

10,026

11,291

14,177

28,526

63,527

December

11,465

7,332

11,362

16,266

14,074

TOTAL

690,751

821,506

765,206

630,477

459,971


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