Job Cuts Fall to 5-Month Low Before Election Day

By Roy Maurer Nov 7, 2016
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Layoffs in October fell 31 percent from the previous month in the final job cuts report before Election Day 2016.

U.S. employers announced 30,740 job cuts last month, the second lowest total of the year, according to the report released by global outplacement consultancy Challenger, Gray & Christmas, Inc.

October's total was 39 percent lower than a year ago, when announced job cuts totaled 50,504.

"One might be inclined to speculate that the impending election might be causing employers to hold off on major workforce decisions," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. "However, we did not see similar declines in other election years. This low monthly total is most likely due to the fact that the economy is relatively healthy and that most employers don't see those conditions changing in the next three to six months."

Employers have announced 466,352 job cuts through October 2016, down 14 percent from the 543,935 cuts announced through October 2015.

"Over the last few years, since the end of the Great Recession, the final two months of the year have seen some of the lowest job cut totals of the year," Challenger said.

Last year, employers announced 23,622 layoffs in December, which was the lowest monthly total since 2000. That was not always the case. "From the late 1990s up until the latest recession, the fourth quarter was typically the heaviest in terms of job cuts," he said.

[SHRM members-only toolkit: How to Conduct a Layoff or Reduction in Force]

Tech Firms Plan Heavy Cuts

IT companies accounted for the largest number of October layoffs, announcing 4,792 planned payroll cuts. The IT sector has announced 64,511 job cuts this year, second only to the energy sector, where job cuts total 103,147.

Most of the cuts announced came from newly formed HP Inc., (split off from Hewlett-Packard in 2014) which struggled to find its footing in a rapidly changing tech sector, Challenger said. The firm cut another 4,000 jobs last month, adding to the 30,000 job cuts the company announced in 2015.

"Heavier job cuts in the tech sector this year have been more indicative of an industry that is in flux, as opposed to one that is in trouble," Challenger said. "That is the nature of technology, so it is not unusual to see workforce volatility. Overall, the tech sector is about as healthy as it gets."

Year-to-date, the energy (103,147), computer (64,511), retail (53,119), industrial goods (29,377) and financial (19,387) sectors make up the top five industries for number of layoffs. Texas leads the states in layoffs year-to-date (102,442), followed by California (70,598), Arkansas (26,244), Illinois (20,655) and North Carolina (19,422).

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