Retailers Lead Surge in Job Cuts

By Roy Maurer Feb 5, 2016
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Despite strong holiday sales at the end of 2015, retailers announced their starkest downsizing plans in seven years, pushing layoffs in January 2016 to 75,144, according to the latest report on monthly job cuts released by global outplacement consultancy Challenger, Gray & Christmas. This January’s layoffs are 42 percent higher than the total from January 2015, when employers cut 50,041 jobs. It was the largest January total since 241,749 job cuts were announced during the first month of 2009.

Internet Sales to Blame

Retailers led all other industries in January job cuts, announcing plans to trim 22,246 jobs, the highest retail total since January 2009, when retailers announced 53,968 layoffs.

Retail cuts were dominated by Wal-Mart and Macy’s, according to the report. Wal-Mart announced plans to close 269 stores worldwide—154 in the U.S., which is expected to impact 16,000 workers. Macy’s announced that 36 stores would be shuttered across the U.S., a move that will affect 4,820 employees.

This is despite the fact that retail holiday sales grew by nearly 8 percent from the previous year. However, a larger portion of the sales gains in recent years are occurring online, said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “At Macy’s, for example, November and December sales at its brick-and-mortar stores fell by about 5 percent, while orders through its online entities were up 25 percent from a year earlier, according to reports. This shift is making it necessary for retailers like Macy’s and Wal-Mart to rethink their strategy, moving away from traditional stores and investing more into Internet sales.”

Energy Sector Cuts Continue

The oil and gas industry continued to eliminate jobs at a record pace in January 2016. Overall, energy sector employers announced plans to reduce head counts by 20,246 for the month of January. The previous high was January 2015, when 20,193 jobs in the sector were eliminated.

“The pace of downsizing in the energy sector ebbed in the second half of 2015, but the latest activity … is evidence the industry is far from concluding its cost-cutting initiatives,” Challenger said. “With oil prices expected to stay low for the foreseeable future, the potential for continued layoffs remains elevated.”

Since oil prices began their decline in late 2014, oil field services companies Schlumberger, Halliburton and Baker Hughes have announced 30,000, 22,000 and 16,000 job cuts respectively, through multiple layoff announcements.

Following cuts in the retail and energy sectors, companies in the computer (11,003), telecommunications (3,371) and pharmaceuticals (3,046) industries rounded out the top five industries experiencing layoffs.

Texas saw the most job cuts in January (27,297), followed by Arkansas (16,100), Ohio (6,075), Virginia (3,840) and New Jersey (3,020).

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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