Job Cuts Rose by 35 Percent in April

Layoffs announced in the energy, computer sectors

By Roy Maurer May 9, 2016
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U.S. employers laid off 65,141 workers in April 2016, according to the latest report from global outplacement consultancy Challenger, Gray & Christmas.

April’s job cuts increased by 35 percent month-over-month and were nearly 6 percent higher than the 61,582 cuts reported in April 2015.

Layoffs for the first four months of the year (250,061) are up 24 percent from the same period last year and mark the highest January-April total since 2009, when the opening four months of the year saw 695,100 job cuts.

While large-scale downsizing in the energy sector is primarily to blame, “we are also seeing heavy downsizing activity in other areas, such as computers and retail, where changing consumer trends are creating a lot of volatility,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

Energy sector employers announced 19,759 layoffs in April, bringing the year-to-date total to 72,660. Computer companies announced 16,923 job cuts during the month, including 12,000 jobs lost at Intel, which is shifting away from the traditional desktop and laptop market and toward the mobile market, Challenger said. So far in 2016, computer companies have announced 33,925 job cuts.

Intel joins several other major computer firms announcing large-scale job cuts in recent months. Earlier this year, Dell announced it was cutting 10,000 jobs. In 2015, Hewlett-Packard cut 30,000 jobs and Microsoft eliminated 7,800 positions.

“It would be wrong to assume that increased job cuts are a sign of weakness in the tech sector,” Challenger said. “The simple fact is that the industry is going through a transformation and companies either have to shift their focus or risk extinction. As a result, we will continue to see a lot of job destruction, along with job creation, in the industry over the next several decades.”

Challenger said that the economy remains strong, despite layoffs trending upward. “It’s not unusual to see heavy job cuts in a strong economy,” he said. “In December 1998, near the height of the dot-com boom, we recorded more than 103,000 planned workforce reductions. The fact is, companies are constantly retooling, and sometimes the best time to do that is when the economy is strong.”

Year-to-date, the retail (36,977), industrial goods (14,756), and entertainment and leisure (8,472) industries round out the top five for planned layoffs. Texas leads in layoffs year-to-date (71,186), followed by California (34,160), Arkansas (16,995), Illinois (11,073) and New York (9,094).

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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