"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Wednesday, March 30, 2011

The Challenger Job Cut Report

Challenger, Gray, and Christmas is, according to their web site, "the nation's first, oldest and premier outplacement consulting organization. Our firm has a proven track record of successfully providing top quality outplacement programs for executives, middle managers and long-term or highly valued employees." They work with companies that are laying off employees to assist those employees in finding new positions. As a result, they have some insight into current plans to cut jobs.
One of the things they do with this data is release a monthly Job Cuts report. Traditionally, this report is not considered as significant as some of the other employment reports (ADP Employment, first time jobless claims, and employment situation), but it is still an additional resource that can be used to gauge what the national employment situation looks like.
The February report indicated that employers had announced plans to cut 50,702 jobs. In the report for March, we learn that the rate of downsizing is slowing. Employers announced plans to reduce payrolls by 41,528 jobs, bringing the Q1 job cut total to 130,749. That sounds like a lot, but Q1 2010 saw 181,183 planned layoffs. In fact, this is the lowest Q1 layoff total since 1995.
Of those 41,528 job cuts, 19,099 (46%) are public sector, up 17% from February's 16,380 planned layoffs. The telecommunications industry was the second largest source of job cuts, but they only had 2,378 announced for March. Interestingly enough, the insurance industry had no job cuts planned for March. 12,791 (30.8%) of the job cuts are from restructuring, 10,247 (24.7%) are from cost cutting, and 5,75313.9%) are from businesses closing.

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