September 2020 Job Cuts: Year-to-Date Cuts At Record High

from Challenger Gray and Christmas

Job cuts announced by U.S.-based employers jumped to 118,804 in September, up 2.6% from August’s total of 115,762.

September’s total is 186% higher than the 41,557 job cuts announced in September 2019.

Last month’s job cuts bring the yearly total so far to 2,082,262, up 348% from the 464,869 cuts at this time last year. The current year-to-date total already surpasses the record highest annual total – 1,956,876 cuts announced in 2001 – by 125,386 cuts. Challenger began tracking job cut announcements in January 1993.

“We are setting new records for job cuts even though things have improved since the earliest days of the pandemic,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

“These are uncertain times for everyone, as many states are experiencing an uptick in the number of COVID-19 cases. It is clear we still have a long way to go before many industries can return to normal.”

Year to date, the reason cited for the most announced cuts is COVID-19, which has caused 1,091,923 cuts in 2020. In September, market conditions caused 45,213 of the announced cuts, followed by 33,713 job cuts due to demand downturn, and 11,562 cuts due to restructuring. COVID-19 is the reason for 8,529 cuts last month.

The third quarter of 2020 saw 497,215 job cuts, down 59.8% from the 1,238,364 cuts announced in the second quarter. It is 271% higher than the 133,882 cuts announced in the third quarter of last year. After the second quarter of this year, it is the highest quarterly total since Q1 2019, when 562,510 job cuts were announced.

The majority of cuts continue to come from Entertainment/Leisure companies, including bars, restaurants, hotels, and amusement parks, which announced 32,099 cuts in September, an 86% increase over the industry’s 17,271 cuts announced in August, and a 2,691% increase over the 1,150 Entertainment/Leisure cuts tracked in September 2019. So far this year, these companies have announced 831,150 cuts, a 7,553% increase over the 10,861 cuts announced in the sector through September 2019.

Aerospace/Defense announced the second-highest number of job cuts in September, with 18,971, bringing the year-to-date total to 74,867. That is 1,158% higher than the 5,953 cuts announced in that sector through the third quarter of last year.

The Transportation sector followed with 16,628 cuts for the month, bringing the sector total through September to 148,199, 517% higher than the 24,034 announced through the same period in 2019.

“We are beginning to see cuts spread to sectors outside Entertainment and Retail. Especially if another relief package fails to pass, employers are going to enter the fourth quarter hesitant to invest or spend,” said Challenger.

Retailers have announced the second-highest number of job cuts this year, with 176,976, 171% higher than the 65,358 cuts announced through the same period last year.

But the Retail Industry also led in announced hiring plans in September, with 326,887 jobs, bringing the year-to-date total for the sector to 936,403 hires. Retailers so far have announced 378,200 seasonal hires.

“Traditional retailers have faced unprecedented challenges because of COVID-19. With high unemployment and a dwindling government stimulus, it is difficult to predict what the demands of the holiday season will be,” said Challenger.

“However, while retail sales in the second quarter were lower than a year earlier, online shopping has surged during the pandemic. Retailers with solid online infrastructures are bracing for high demand,” he added.

The Entertainment/Leisure industry announced 279,543 hiring plans in September. McDonald’s announced 260,000 new jobs, as it plans to reopen more restaurants and increase capacity.

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB CUT ANNOUNCEMENT REPORT

Table 1: EXECUTIVE SUMMARY

Table 2: JOB CUTS BY INDUSTRY

Copyright 2020 Challenger, Gray & Christmas, Inc.

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