ITT Tech Shutdown Generates Education-Sector Layoffs

By Roy Maurer Oct 12, 2016
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U.S. employers announced plans to cut 44,324 jobs in September 2016, led by a huge increase in education-sector layoffs stemming from the demise of ITT Technical Institutes.

September's job cuts were up 38 percent from August but 25 percent lower than the 58,877 layoffs announced in September 2015, according to the monthly report released by global outplacement consultancy Challenger, Gray & Christmas.

Downsizing in education increased by 363 percent in September from the previous month to 8,671 jobs lost, the majority of which came from the ITT closures. ITT, once one of the country's largest for-profit schools, announced Sept. 6 that it was closing due to government interference and laying off 8,000 employees nationwide.

Through the first nine months of the year, employers have announced a total of 435,612 job cuts, which is 12 percent fewer than the 493,431 cuts reported through the same period in 2015.

"Each quarter has seen the number of overall job cuts decline, as [the energy] sector stabilized and the economy continued to improve," said John Challenger, chief executive officer of Challenger, Gray & Christmas. "It is not unusual to see decreased job-cut activity in the third quarter, as many employers postpone major workforce decisions during the summer months," he said, adding that a resurgence in cuts could be coming. "The fourth quarter is typically when companies make strategic moves to prepare for the coming year."

The education, computer (4,152) and retail (7,296) industries experienced the most job cuts in September. However, job losses in retail will be "more than offset" by nearly 230,000 new seasonal jobs, Challenger said. Retailers and affiliated logistics employers in transportation and warehousing are adding tens of thousands of temporary jobs as more holiday shopping is done online.

"Many seasonal workers will be able to turn them into full-time positions," Challenger said. "For those hoping to work beyond Dec. 31, it is critical to make a positive impression during the holidays."

Year-to-date, the energy (98,733), computer (59,719), retail (51,939), industrial goods (27,340) and financial (18,919) sectors make up the top five industries for number of layoffs. Texas leads the states in layoffs year-to-date (97,787), followed by California (63,111), Arkansas (26,244), Illinois (19,070) and North Carolina (18,685).

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