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Wednesday, May 4, 2011

The Challenger Job Cut Report

It's only Wednesday, but we're starting to get some employment data crawling out of the woodwork in preparation for Friday's Employment Situation report.
The Challenger Job Cuts report is issued by the outplacement consulting firm Challenger, Gray, and Christmas[1], which works with companies that are laying off employees to assist those employees in finding new jobs.  As a result, they have a lot of insight into current plans to cut jobs, and use that data to release a report about layoff trends.
One thing you have to keep in mind about the report.  The job cut figures do not represent layoffs for the month.  Instead, they represent layoffs announced during the month, even if the actual job losses will be in future months.  (That is, if a firm announces in March that it will lay off 30 workers by the end of August, the Challenger report puts that in the March figures instead of the August figures.)
The report for March was mixed.  They calculated that employers would cut 41,528 jobs, mostly in the public sector (46%, in fact), which brought the Q1 job cut total to 130,749 - which was the lowest Q1 layoff total since 1995.
That's nice and all, but how is April looking?  Well, according to the report, April is looking pretty good.  Employers announced plans to cut 36,490 jobs from their payrolls during the month, bringing the year to date layoff figures to 167,239.  I bring that little factoid up because the report indicates that hiring is on the rise;  year to date, employers have announced plans to add 172,590 new workers - 59,648 in April alone.
On the down side with those hiring figures, 50,000 of the 59,648 new hires announced in April were from McDonalds.  And while yes, a job at McDonalds is a paying job, it's not usually considered to be a job with good pay, benefits, or long-term prospects.
On the up side, John Challenger (CEO of Challenger, Gray & Christmas) notes that "It is important to realize that our hiring figures represent just a fraction of the job creation that is actually occurring, since most employers do not publicly announce hiring intentions."
29.4% of the planned job cuts are government and/or non-profit jobs.  The next largest number of planned layoffs come from the aerospace & defense industry, at 12.37%.  The top reasons for job cuts are cost-cutting (24.94%), business closing (24.73%), and restructuring (20.1%).
[1]  Their corporate motto is not "It's Christmas!  You're getting laid off![2]"  But it's fun to pretend that it is.
[2]  Actually, I think that current corporate speak would actually state this as "It's Christmas!  You've been granted the opportunity to participate in a rightsizing opportunity!".

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