from Challenger Gray and Christmas
As companies increasingly report difficulty finding and keeping talent and the Delta variant spurs a rise in COVID cases, U.S.-based employers announced 18,942 job cuts in July, down 93% from the 262,649 cuts announced in the same month last year.
Last month’s total is the lowest since in June 2000, when 17,241 job cuts were announced.
July’s total is 7.5% lower than June, when 20,476 cuts were recorded.
So far this year, employers have announced plans to cut 231,603 jobs from their payrolls, down 87.5% from the 1,847,696 jobs eliminated through the same period last year. It is the lowest January-July total on record. The second lowest occurred in 1997, when 233,915 cuts were tracked.
“In a healthy economy, there’s a good amount of churn. Right now, things appear to be stalling,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“There are over 9.2 million job openings and 9.5 million unemployed. The positions and workers are not connecting,” he added.
July cuts were led by the Pharmaceutical sector, which announced 2,249 cuts, primarily due to diminishing demand for COVID tests and related materials. Industrial Goods manufacturers announced the second highest with 2,037. These companies are still plagued by supply chain issues from the beginning of COVID lockdowns. The Services sector announced 1,941 cuts in July.
“Even though these sectors announced the most cuts last month, it is still a relatively low number. Companies in all of these industries are generally looking for workers,” said Challenger.
Companies in Aerospace/Defense have announced the most cuts this year with 32,998, down 40% from the 55,131 cuts announced in the sector through this point last year. Telecommunications follows with 24,883 cuts, down 15% from the 29,456 announced during the same period last year.
COVID is still contributing to job cuts, though at a far slower pace. Last month, 153 cuts were attributed to COVID-19 for a total of 7,950. Last month’s total is 97% lower than the 4,620 cuts announced for this reason in January. So far this year, 1,154 cuts have been attributed to a downturn in demand for products directly related to COVID.
“It remains to be seen what the Delta variant may do to job cuts, if anything. At this point, companies are trying to attract and retain talent, not let them go,” said Challenger.
The majority of cuts (5,411) last month were attributed to plant, unit, or store closings, while 4,589 were from a demand downturn.
Challenger continues to follow losses in the News industry, which is tracked as a subset of Media cuts. Through July, Newsrooms have announced 1,009 job cuts, with 0 occurring in July. Challenger did not track any announced job cuts from Media companies in July.
News cuts are down 93% from the 14,472 announced through July last year. In fact, last month, NBC News announced it would add 200 new jobs in its digital operations.
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