52,961 MAY JOB CUTS; MOST IN 15 MONTHS
from Challenger Gray and Christmas
Job cuts climbed to the highest level in more than a year, as US-based employers announced plans to reduce payrolls by 52,961 in May. May job cuts were up 31 percent from 40,298 announced layoffs in April. It was the second consecutive increase in monthly job cuts and the largest one-month total since February 2013, when 55,356 job cuts were recorded.
Last month’s total was 46 percent higher than the 36,398 job cuts announced in May 2013.
To date, employers have announced a total of 214,600 planned job cuts in 2014, which is 2.3 percent fewer than the 219,560 job cuts tracked in the first five months of 2013.
The heaviest downsizing in May occurred in the technology sector, where computer firms announced plans to cut payrolls by 18,799. Hewlett-Packard, which has announced several large-scale workforce reductions in recent years, revealed plans to cut as many 16,000 workers in its ongoing efforts to “reengineer the workforce to be more competitive.”
The May total for the computer industry was the largest since May 2012, when cuts reached 27,754, due primarily to another large job-cut announcement from Hewlett-Packard.
Top 5 Job Cutting Industries in May
The computer industry now leads all others in year-to-date job cuts, with 29,863. The retail sector trails closely with 25,696 job cuts announced in 2014. Retail job cuts are down slightly from a year ago when these employers announced 32,683 job cuts from January through May. Says John A. Challenger, chief executive officer of Challenger, Gray & Christmas:
Five-figure job-cut announcements, such as Hewlett-Packard’s last month, have been rare since the recession ended in 2009. The last time we saw a figure on this scale was February 2013, when JP Morgan Chase announced a large reduction in the number of bankers in its mortgage unit, most of whom were hired in the wake of the recession to deal with the flood of foreclosures and the refinancing of troubled loans.
Despite the May surge resulting from the latest H-P cuts, the overall pace of downsizing has slowed from year ago. While some industries, including computer, have seen an increase in job cuts, most of last year’s leading job-cut industries have experienced a decline. And, as we approach the midway point of the year, we do not expect a second-half surge in downsizing unless there is a sudden and severe shock to the economy.
Several recent reports suggest continued growth in the coming months. Factory orders increased for the third consecutive month in April and automakers are reporting strong sales. On Tuesday, a report indicated that small businesses saw its strongest hiring push in more than a year, as these firms added 35,000 workers to their payrolls. That nearly triples the average 12,000 workers added per month since April 2010.
Moreover, the latest report on metropolitan area unemployment from the Bureau of Labor Statistics shows that there are now 118 metro areas with unemployment rates below 5.0 percent. All of this bodes well for the nation’s job seekers.