Retail-Sector Job Losses Offset by Holiday Hiring

November layoffs lowest recorded monthly total for the year

By Roy Maurer Dec 5, 2016

Retail employers reported the highest job cuts of any sector in November, but losses are more than offset by the tremendous surge in holiday hiring.

Nearly 5,000 retail employees were targeted for layoffs during the month, most of them resulting from the Nov. 14 bankruptcy announcement from American Apparel, which the company said could impact nearly 3,500 workers. But seasonal holiday hiring has added hundreds of thousands of new jobs since September.

"In the past, the holiday season offered no protection against year-end surges in job cuts," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, a global outplacement consultancy based in Chicago. "In fact, prior to the Great Recession, the December job-cut average was consistently higher than the 12-month average. That has not been the case in the five years since the end of the downturn."

Job cuts around the holidays always present a public relations risk, Challenger said. Especially on social media, "where the sharing of news is often paired with biting commentary that can have serious consequences for an employer's image and brand reputation."

Overall, retail job cuts are down 12 percent from one year ago, according to the latest job cuts report from Challenger, Gray & Christmas. Through November, these employers have announced plans to shed 57,969 workers, compared to 65,609 job cuts recorded during the same period in 2015.

Even with the decline, year-to-date retail job cuts rank third among all industries, behind energy job cuts (105,041) and computer-sector cuts (66,188).

The pace of downsizing fell to the lowest level of the year in November, as employers announced plans to shed 26,936 jobs. To date, employers have announced 493,288 job cuts in 2016, a 5.5 percent dip from the payroll cuts recorded by this point in 2015.

[SHRM members-only how-to guide: How to Conduct Layoffs]

"Barring an unlikely December surge in downsizing, the year-end job cut total should remain well below the 598,510 layoffs announced last year," Challenger said. "Even if the new administration creates some uncertainty among corporate forecasters, most employers are in a strong enough position to take a wait-and-see approach when planning for next year."

November job cuts were 12 percent lower than the 30,740 cuts announced in October. They are down 13 percent from last November, when job cuts totaled 30,953.

"Despite a few notable exceptions, including energy and computer, most industries have seen job cuts decline in 2016," Challenger said. "The pace of downsizing has continued to slow throughout the year, with the monthly average falling from 52,292 in the first six months of 2016 to 35,907 in the five-month period ending in November."

Year-to-date, Texas leads the states in layoffs (103,335), followed by California (78,408), Arkansas (26,244), New York (23,400) and Illinois (22,462).

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