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

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Wednesday, June 1, 2011

The Challenger Job Cut Report

It's Employment Situation season, and in celebration of that fact we'll be looking at employment data for the rest of the week.  Right out of the gate, we have the Challenger Job Cuts report.  This report comes to us courtesy of the outplacement consulting firm Challenger, Gray and Christmas, which gets hired by companies that are getting ready to lay people off to help the new non-employees find jobs.  As you might imagine, this gives them a lot of insight into current corporate layoff plans.
Bear in mind that the job cut figures they provide are layoffs announced during the month, not layoffs in the month.  So, if they show 30,000 job cuts in May, that doesn't mean all 30,000 will be cut in May.  It could be 10,000 in May, 8,000 in June and 12,000 in July.
April was mixed.  Employers announced plans to cut 36,490 jobs (a decline from March's 41,528), bringing the year to date layoff figures to 167,239.  They also reported that employers had announced plans to hire 59,648 new employees that month - not a spectacular as it could have been, as 50,000 of those jobs were from McDonalds[1].  29.4% of the planned job cuts were government and/or non-profit jobs.  The next largest number of planned layoffs came from the aerospace & defense industry, at 12.37%.  The top reasons for job cuts were cost-cutting (24.94%), business closing (24.73%), and restructuring (20.1%).
There are no analyst predictions for this, so on to the report itself.  Employers announced plans to cut 37,135 positions from their payrolls during May, which we can call practically unchanged from April (it's a 1.8% increase), bringing the year to date total to 204,374 (or about 79% of the January through May 2010 totals).  The government and non-profit sector continues to lead the layoff pack at 14,755 job cuts announced (39.7% of the total), and aerospace and defense continues to hold second place at 5778 planned job cuts (15.6% of the total).  The top reasons for job cuts continue to be cost-cutting (43%), business closing (33.8%), and restructuring (9.4%).
[1]  And let's be honest here, while McDonalds is a paying job it's lacks a certain je ne sais quoi.  Like good pay.  Or benefits.  Or retirement.  Or much in the way of advancement opportunities.

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