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Job cuts in June decline to lowest level of the year
Downsizing has slowed this year compared to the first half of 2016, according to the newest report from outplacement consultancy firm Challenger, Gray & Christmas Inc.
Through the first six months of the year, U.S. employers announced 227,000 planned job cuts, down 28 percent from the 313,754 cuts announced through the first half of 2016.
U.S. companies announced 31,105 job cuts in June, a 6 percent decline from the cuts announced in May, and 19 percent lower than June 2016.
The June job-cut total is the lowest monthly total of the year. Employers may be having a difficult time recruiting new talent with the unemployment rate at 4.3 percent, so they're holding on to their existing workers, said John Challenger, CEO of Challenger, Gray & Christmas.
[SHRM members-only how-to guide: How to Conduct a Layoff or Reduction in Force]
"In a tight labor market, it's no surprise companies are holding on to their existing workforces," he said. "Companies are also waiting to see how proposed regulations from the Trump administration may impact business going forward."
Job cuts in the second quarter of the year totaled 100,799, down 20 percent from the 126,201 cuts announced in the first quarter and 24 percent lower than the 132,834 announced cuts in the second quarter of 2016.
"It is typical to see fewer announced job cuts in the summer months," Challenger said. "We have not seen large-scale layoffs this year, as we did in the last two years, especially in the tech and energy sectors."
Falling oil prices was attributed as the cause for over 70,000 energy-sector layoffs through this point last year and the technology industry shed over 50,000 jobs through June 2016. That's 52.5 percent more than the 23,813 tech-sector layoffs so far this year.
Retailers have announced 60,127 job cuts through June, 42 percent more than the 42,095 cuts announced through the first half of 2016. "Pivoting in the retail sector has led to job cuts, but we are not yet seeing them at the level they were immediately after and during the recession or in 2003, when online shopping really began to catch on," Challenger said.
However, retailers cut more jobs in the first half of 2017 than in any other first six months of a year since 2009, when 85,698 workers were laid off. The sector went on to announce 98,807 job cuts that year, the highest annual total since 2003, when 100,518 layoffs were recorded.
"We've tracked over 5,000 announced store closings this year, as retailers continue to focus operations online," Challenger said. "It is likely we'll continue to see cuts in the retail sector going forward, but it remains to be seen if they will mirror the cuts that occurred in the 2000s."
After retail, companies in the health care (17,920), services (15,415), automotive (12,570) and telecommunications (11,367) industries rounded out the top five sectors experiencing layoffs this year.
California has seen the most job cuts so far this year (32,630), followed by Texas (21,005), Ohio (20,814), Indiana (17,038) and New York (13,777).
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