2014 U.S. Job Cuts Lowest Since 1997

By Roy Maurer Jan 8, 2015

Employers announced 483,171 job cuts in 2014, a 5 percent decline from the final 2013 total and the lowest annual total since 1997, according to a report from global outplacement consultancy Challenger, Gray & Christmas.

December 2014 layoffs fell for a second straight month, down 9.2 percent from 35,940 layoffs in November to 32,640. December’s total is still 7 percent higher than the same month a year ago, when employers announced 30,623 job cuts.

Layoffs are at pre-2001 recession levels, noted John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a statement. “This bodes well for job seekers, who will not only find more employment opportunities in 2015, but will enjoy increased job security once they are in those new positions,” he said.

The computer industry experienced the heaviest downsizing of the year, announcing a total of 59,528 planned layoffs in 2014, a whopping 69 percent increase from 2013. “A large portion of the pink slips came from tech giants Hewlett Packard and Microsoft, where both are attempting to become more nimble in a very competitive market,” the report said.

Job cuts in the retail sector declined by 11 percent in 2014, but the industry still ranked second with 43,783 layoffs announced during the year. The health care sector shed 38,359 jobs in 2014, down from 52,637 job cuts in 2013.

Overall, 16 of the 28 industries tracked by Challenger saw fewer layoffs in 2014, with an average decline of 34 percent. The steepest decline came from the insurance industry, with job cuts falling 65 percent from 6,519 in 2013 to 2,259 last year.

The largest increases in job cuts occurred among employers in the entertainment industry and electronics. Entertainment industry layoffs jumped 125 percent from 14,342 in 2013 to 32,235. A 120 percent surge was experienced among electronics employers, with job cuts jumping from 8,830 to 19,408.

California saw the most job cuts of 2014 (83,433), followed by New York (37,312), Washington (34,878), Illinois (32,048) and New Jersey (31,002).

Challenger is optimistic about the labor market going forward. “We expect downsizing to remain subdued in 2015, as a growing number of employers turn their attention toward job creation,” he said. However, he warned that falling oil prices could lead to increased job cuts in one of the bright spots for 2014: energy. “Lower prices mean less money for research, exploration and new drilling operations,” said Challenger.

Continued improvements in the housing market, the Affordable Care Act, and new technology advancements are expected to drive the economy and employment gains in 2015, he added.

“There are also some promising long-term trends that will help drive job creation now and in the future,” he said. “One of those trends is the consumerization of the drone industry. It may sound silly, but the expanded use of unmanned aircraft beyond military applications is expected to add 100,000 jobs to the economy over the next decade, according to one recent report.”

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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