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posted on 09 March 2017

February 2017 Job Cuts Fall and Hiring Explodes

from Challenger Gray and Christmas

The shortest month of the year saw a decline in layoff announcements, as US-employers announced plans to cut 36,957 jobs in February, 19 percent fewer than the 45,934 cuts announced in January.

Last month's total was 40 percent lower than the 61,599 cuts announced in February. Employers have announced 82,891 job cuts so far this year, which is a 40 percent decline from the 136,713 job cuts announced through February of last year.

Retail continues to lead all sectors in job cuts as the industry pivots toward online and shrinks brick-and-mortar operations. Retailers announced 11,889 job cuts in February for a two-month total of 34,380. Retail cuts are nearly 580 percent more than the 5,930 cuts recorded in the energy sector, the next highest industry so far this year. Said Andrew Challenger, vice president of Challenger, Gray & Christmas:

Retailers are experiencing a tremendous transformation from the traditional business model. The cost of digitizing merchandise, moving sales to online, and downsizing physical stores will likely take a toll on employees in this field,.

The largest layoff announcement last month came from JC Penney which will close 140 stores and cut 5,500 jobs. Grand Rapids-based Family Christian Stores is closing 240 stores in 36 states eliminating 1,300 workers, while L.L. Bean announced buyouts to over 900 staff in an effort to trim 10 percent of its workforce.

Despite the cuts, this shift in retail will ultimately create new opportunities for job seekers, but they will need the requisite skills. The new retail employee will need considerable tech abilities, in addition to the necessary customer service experience.

Indeed, retailers are seemingly adding jobs just as quickly as they are cutting. Through February, Challenger has tracked over 33,000 hiring plans announced by retailers. According to the latest data from the Bureau of Labor Statistics, retail experienced the most job gains in January with 46,000 jobs added.

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

TOP FIVE INDUSTRIES

Year To Date

2017

2016

Retail

34,380

23,342

Energy

5,930

45,154

Health Care/Products

4,181

1,699

Computer

4,177

16,006

Automotive

4,008

4,038

MONTH BY MONTH TOTALS

2017

2016

January

45,934

75,114

February

36,957

61,599

March

44,207

April

64,141

May

30,157

June

38,536

July

45,346

August

32,188

September

44,324

October

30,740

November

26,936

December

33,627

TOTAL

82,891

526,915

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

LAYOFF LOCATION

Year To Date

Ohio

17,710

Texas

13,124

California

10,395

Pennsylvania

4,632

Michigan

4,151

Copyright 2017 Challenger, Gray & Christmas, Inc.

The energy sector, meanwhile, recorded an 87 percent decline in job cut announcements compared to this point last year. Energy companies announced 5,930 cuts through February this year, versus 45,154 job cuts during the same period in 2016. Oil and gas companies announced 3,281 of the 4,077 energy sector job cuts last month. Adds Challenger:

The energy sector announced over 107,000 jobs last year. It seems the bleeding has stopped for now. The new administration and EPA chief Scott Pruitt have already enacted legislation to aid oil & gas companies, but it remains to be seen if those actions will result in more jobs.

February saw an increase in financial cuts as employers in this sector announced 3,292. That is 1,166 percent more than the 260 announced in January and 227 percent more than the 1,006 cuts announced in February 2016.

The finance industry is experiencing its own shift to digital, which while causing job loss is also creating jobs. Finance experienced the third most job gains in January, according to the BLS.

Hiring announcements are at an all-time high, according to Challenger tracking. In the first two months of the year, employers have announced plans to hire 162,266 workers, the bulk of which came from Amazon's January announcement to hire 100,000 workers. That is the highest January-February hiring total on record. The next highest total for the first two months of the year occurred in 2013, when employers announced plans to hire 152,957 workers.

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