October 2014 Job Cuts Exceed 50K

Total job cuts for year remains 4.3 percent lower than last year

By Theresa Minton-Eversole Nov 7, 2014
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There’s good news and bad news this quarter for those keeping tabs on wins and losses in the country’s hiring game.

Just one month after falling to a 14-year low, monthly job cuts surged nearly 70 percent in October to the second highest total in 2014, according to information released Nov. 6 by global outplacement consultancy Challenger, Gray & Christmas Inc.

U.S.-based employers announced 51,183 job cuts last month, a 68 percent increase from September’s 30,477, which was the lowest monthly total since June 2000. October job cuts were 12 percent higher than the 45,730 layoffs announced during the same month a year ago. The October total not only is the second highest of the year, behind May’s 52,961, but also marks only the fourth time in the last 22 months that job cuts exceeded 50,000.

Challenger reports that employers have now announced 414,591 job cuts so far this year. That’s 4.3 percent fewer than last year, when 433,114 job cuts were reported from January through October.

“While it is too early to say for certain, the October figure may mark the kick-off to a fourth-quarter surge in job cuts,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, in a Nov. 6 statement. “It is not unusual to see the pace of downsizing accelerate in the final months of the year, as employers take measures to meet year-end earnings and profit goals.”

Challenger said that since the end of the recession, however, fourth-quarter surges in job cuts have been somewhat subdued, with many of the increases occurring in October and November. In fact, in the previous two years, the month of December saw some of the lowest numbers of job cuts.

The retail industry reported the most cuts in October with 6,874 planned layoffs. That’s nearly 3.5 times more than the 1,965 job cuts announced by retailers in September. Year to date, this sector has announced 38,948 cuts.

Computer firms announced 6,509 job cuts in October, bringing the year-to-date total for the industry to 55,511. The industry’s job-cutting activity leads all other sectors by a wide margin.

“If there is any good news in the October job-cut surge, it is that the leading job cuts are not indicative of overall weakness in the economy,” Challenger said. “The heaviest cuts came from companies that are struggling to find their footing in this recovery. In several cases, downsizing organizations are in industries that are going through fundamental changes, and these companies are taking steps to catch up to these changes.”

Hiring Continues in Some Sectors

There are some industries that plan to increase their hiring, however. Job creation rates for November will rise in the manufacturing and service sectors compared with November last year and could reach four-year highs, according to the Society for Human Resource Management’s (SHRM’s) Leading Indicators of National Employment (LINE) report, also released Nov. 6.

The LINE report examines employers’ hiring expectations, job vacancies, difficulty in recruiting top-level talent and new-hire compensation, based on monthly surveys of private-sector human resource professionals at more than 500 manufacturing and 500 service-sector companies.

“November’s employment expectations data is fairly upbeat,” said Jennifer Schramm, GPHR, SHRM’s manager of workforce trends and forecasting. “Hiring activity will continue to increase as a net of more than two out of five manufacturing and more than one-third of service-sector firms say they’ll be adding to head count.”

A net of 42 percent of manufacturers reported they will add jobs this month, representing a 1.6-point rise in the sector’s hiring index compared with a year ago. A net of 37 percent of responding service-sector companies said they will grow payrolls this month—a 2.9-point rise in the sector hiring index compared with a year ago.

Theresa Minton-Eversole is an online editor/manager for SHRM.​

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