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Job Cuts to Date Are Down 11% from 2012
Media, financial, health care sectors account for most cuts through May 2013

By SHRM Online staff  6/7/2013
 
Monthly job cuts declined for the third consecutive month in May, as U.S.-based employers announced plans to trim payrolls by 36,398 during the month—that’s a 4.5 percent drop from April, when they made 38,121 cuts.  The May 2013 total was 41 percent lower than the total for the previous May, when employers slashed payrolls by 61,887, according to a report released June 6 by global outplacement consultancy Challenger, Gray & Christmas Inc.

To date, the nation’s employers have announced 219,560 planned job cuts in 2013.  That’s down 11 percent from the 245,540 planned cuts announced in the first five months of 2012. 

It is not unusual to see fewer job cuts heading into and during in the summer months. In fact, historically, May is the slowest job-cut month of the year, averaging 57,688 since 1993. The next lowest job-cut month is June, according to Challenger records, which show it averaging 59,887 cuts since 1993.  The overall average monthly total across all months since 1993 is 70,288.

The heaviest job-cutting last month occurred in the health care sector, where 4,886 cuts were tracked. That was up slightly from 4,268 health care job cuts in April and more than double the 2,353 announced in May 2012.  Overall, layoffs in health care have risen 71 percent in 2013, compared with the first five months of 2012.

Only two other sectors have seen bigger gains: media, where job cuts have increased 249 percent in the first five months of 2013, compared with the same period in 2012; and the financial sector, where cuts are up 103 percent for the first five months of the year, compared with that period in 2012.

Largest Job-Cut Increases

 Sector

Jan.-May 2012

Jan.-May 2013

% Change

Media

 1,829

 6,388

 249.3%

Financial

17,284

35,091

103.0%

Health Care/ Products

12,177

20,867

71.4%

Retail

20,983

32,683

 55.8%

Nonprofit

938

1,443

 53.8%

The 35,091 job cuts announced by financial firms this year make this the sector with the highest number of layoffs to date. Retail ranks a close second, with 32,683 cuts this year, including 1,386 in May.

“Despite the increases in some sectors, the overall pace of downsizing has slowed from 2012 levels,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a June 6 statement. “That is particularly good news in light of the fact that 2012 saw the fewest annual job cuts since 1997.”

Job cuts have been on the decline since reaching 55,356 in February, he said—good news heading in to the summer, which is the time of year when all business activity, including layoffs, tends to slow.

"So far, the threat of massive job cuts related to federal spending cuts has failed to materialize,” Challenger said. “There were fewer than 1,500 job cuts directly attributed to federal cutbacks and sequestration. Of course, we are not out of the woods when it comes to government downsizing, but an improving economy is helping to bring in more tax revenue and lower the deficit.  This may delay and/or minimize the impact of cutbacks on workforce levels.”

Even in professions where job-cutting is on the rise, such as health care, simultaneous hiring is offsetting the impact on the economy, according to Challenger data. For example, the nearly 21,000 planned job cuts tracked in the sector this year are far outweighed by job gains. According to the latest Bureau of Labor Statistics (BLS) job report, health care had a net gain of 19,000 jobs in April, marking an average of 24,000 jobs per month over the past year.

Meanwhile, job- search website Granted.com recently tallied the help-wanted ads listed on its site and found more than 521,000 for health care positions.

In retail, where job cuts are up 56 percent this year, more than 550,000 workers were hired in March. And there were still 424,000 openings at the end of that month, according to the BLS job openings and labor turnover survey.

“Home sales and prices are starting to see much better improvements each month,” said Challenger. “If these gains continue, it is going to drive up consumer confidence and spending through the summer, which should help the economy withstand the typical summer slowdown. We expect layoffs to remain muted through the third quarter.”

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