The new year started with an increase in corporate downsizing, as the nation's employers announced plans to cut payrolls by 45,934 in January.
January job-cut announcements were up 37 percent from December 2016, when planned layoffs totaled 33,627.
While last month's tally was the highest since last April (64,141), it was 39 percent lower than January 2016, when employers announced plans to eliminate 75,114 jobs from their ranks.
January job cuts in 2016 were dominated by the energy and retail sectors. This year, planned cuts were concentrated in just retail, which continues to reel from the shift toward online shopping.
The top four job cuts announced during the month occurred in the retail sector, with Macy's leading the pack by reporting plans to close 68 stores and decrease its headcount by 10,000 workers. Said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Overall, it was a solid holiday shopping season, but several retailers, including Macy's were unable to capitalize on stronger consumer confidence and spending.
In all, retailers announced 22,491 planned layoffs in January, accounting for 49 percent of all job cuts recorded during the month. The January total is virtually unchanged from the previous January, when retailers announced 22,246 job cuts to start 2016.
Wet Seal Inc.
Abercrombie & Fitch***
*Based on California Worker Adjustment and Retraining Notification Act listing
**Only cuts found so far in announcements, news reports
A January surge in retail hiring has become the standard. Most retailers ramp up hiring in the final three months of the year to handle the holiday rush. However, as consumers increasingly go online to shop, retailers are not only dismissing temporary seasonal workers, but also increasingly closing stores and laying off permanent staff.
Meanwhile, the energy sector, which announced 20,103 job cuts in January 2016, reported just 1,853 planned layoffs to kick off 2017.
Oil prices were already starting to rebound in the last half of 2016. Now, with an administration that is expected to be very friendly to the oil, gas, and mining industries, many are forecasting a swift and sustained turnaround for these firms in 2017. The fact that January job cuts in the sector were 91 percent lower than a year ago, certainly appears to support that outlook.
January 2016 also experienced heavy layoffs in the computer industry, where employers announced plans to shed 11,003 job cuts. This year, however, job-cut plans announced by these firms totaled 2,211 in the first month of 2017. That represents an 80 percent decline. Challlenger concludes:
Job cuts will not be the leading story in the tech industry this year. It is more likely to be labor shortages, particularly if the new administration continues to tighten the boarders to immigrants, many of whom come to America to work at leading tech companies.
CHALLENGER, GRAY & CHRISTMAS, INC.
JOB-CUT ANNOUNCEMENT REPORT
TOP FIVE INDUSTRIES
Year To Date
MONTH BY MONTH TOTALS
Some reductions are identified by employers as workers who will take early retirement offers or other special considerations to leave the company.
Year To Date
JOB CUTS BY INDUSTRY
Copyright 2017 Challenger, Gray & Christmas, Inc.
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