from Challenger Gray and Christmas
Last week, American workers filed 419,000 initial jobless claims, higher than estimates, despite the lowest number of monthly job cut announcements in 21 years, and a series-low layoff rate, according to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). However, these jobless claims come amid Automakers’ grappling with a semiconductor chip shortage, potential supply chain issues impacting Manufacturing, as well as companies seeing a decline in both COVID testing and cleaning products, like hand sanitizer.
“Clearly, workers are still being let go at a number far higher than pre-COVID levels and are not immediately going into new positions, despite the high number of openings,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“The labor market data we’re analyzing and in our discussions with employers suggest a real disconnect between available workers, their skillsets and desires, and what companies need and are offering to these workers,” he added.
Job cut announcements by US-based employers fell to 20,476 in June, the lowest monthly total since June 2000 when 17,241 cuts were recorded, according to Challenger. The latest JOLTS survey found the layoff rate fell to 0.9%, a series-low for the survey. That said, a shortage of semiconductors is forcing many Automakers to cut shifts, while ongoing supply chain woes are cutting into Manufacturing. Companies that were hit hard during COVID may also consider moving their workforces overseas to save money, further costing jobs.
In addition to these factors, the demand in products specifically for COVID is falling. Abbott Laboratories cut 300 workers in Maine citing a slow-down in testing demand. GOJO Industries also recently cut a shift that produces hand-sanitizer. Challenger tracked 783 announced job cuts in June due to a downturn in demand for COVID-specific products, such as sanitizers and face masks.
“The good news for these workers is that there are opportunities available if they can align their skills with the current high demand for workers. On-the-job training and fair wages will help attract these workers, but another piece is flexibility that some companies either cannot or will not offer,” said Challenger.
A new Challenger survey of over 170 human resource executives and business leaders conducted online in July found 95% of companies are currently hiring and 85% are experiencing a labor shortage. Nearly 74% of respondents cited a desire for more flexibility as the biggest reason workers are leaving, followed by burnout, cited by 59%. [Our full report on this survey will be issued next week.]
