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U.S. employers announced 526,915 layoffs in 2016, a 12 percent dip from 2015 and below the annual job cuts averaged since 2010, the first year of recovery from the Great Recession.
The energy industry suffered the largest number of job cuts in 2016, according to the latest report released by Chicago-based global outplacement consultancy Challenger, Gray & Christmas, Inc.
Energy-sector employers announced 107,714 layoffs during the year, up 14 percent from 2015. Most of the energy cuts were announced in the first half of the year, as the country experienced historically low oil prices. Between January and June 2016, layoffs in the sector totaled 77,211.
Job cuts declined sharply since June, as prices started to recover. About 20 percent of the 30,503 job eliminations in the second half of 2016 came from companies in the renewable energy industry, including wind and solar.
"Oil prices are back on the rise," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. "Oil companies may once again start to expand in 2017. Ironically, the only obstacle in their way may be a shortage of skilled workers."
Challenger explained that during the last energy boom, oil and gas firms could take their pick of workers amid high national unemployment. "Now, they will have to rebuild their workforces at a time when unemployment nationwide is below 5 percent. In many areas, the rate is much lower. In fact, there are nearly 50 metropolitan areas with unemployment rates of 3 percent or lower," he said.
The computer industry also announced heavy layoffs in 2016, cutting 66,821 jobs during the year, which is 7.4 percent more than in 2015. "Last year appeared to be an adjustment year for many big tech firms," Challenger said. "Long-time hardware makers, including IBM and Hewlett-Packard, are undergoing multi-year transformations that will ultimately shift their business away from hardware toward services. Others, including Microsoft, Dell and Intel, are shifting toward mobile while, at the same time, attempting to become more agile."
Challenger added that the future appears uncertain for the tech sector under the incoming Trump administration due to possible new obstacles to offshoring jobs and employing foreign guest workers. "However, the new administration's pro-business policies may ultimately favor these firms and many others. Only time will tell," he said.
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Rounding out the top five job-cutting industries of the year were retail (59,324), industrial goods (33,435), and financial (22,015), each of which saw annual job cuts decline from the previous year.
Texas led the states in layoffs in 2016 (104,261), followed by California (84,224), Arkansas (26,244), New York (25,227) and Illinois (23,028).
December Job Cuts Tick Up
U.S. employers announced 33,627 layoffs in December 2016, up 25 percent from November's total but below the 43,910 job cuts averaged monthly throughout the year.
Last month's tally marked the third consecutive month in which job cuts remained below the annual average.
Layoffs in December 2016 were 42 percent higher year-over-year. The total of 23,622 layoffs announced in December 2015 was the lowest monthly total in more than 15 years.
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