Job Cuts Rocket 37% in October

Print Email

A major job research firm reported employee job cuts rose 37% in October to 75,664.The figure was the highest since July 2015 The Challenger, Gray & Christian data are often used as a hint about what the Bureau of Labor Statistics releases for its unemployment rate when it posts its State Employment and Unemployment Summary, although the two pieces of research use different methodologies. The size of the cuts, nevertheless, is a sign that part of the economy may be rapidly slowing

The most significant part of the report is that 58.2% of cuts were from Verizon Commications Inc. (NYSE: VZ) which were part of voluntary severance deals offered to 40,000 workers. The layoffs are part of a trend which has begun at several large companies as they approach the end of the year. General Motors (NYSE: GM) will offer buyouts to 38,000 workers. Rumors, partially confirmed by the company are that Ford Motor Company (NYSE: F) may restructure, and over 70,000 jobs are being evaluated for future downsizing. Tariff hits on earnings have been given as a major reason for concerns about jobs at both large and small firms.

The Challenger data is very different from results from another private jobs company ADP. Its numbers are closely followed ahead of those from the BLS. It showed private-sector payrolls up 227,000 in October. so experts are sending more than one signal

Challenger Gray named another large company which made large layoffs in September, which its researchers claimed is part of a larger trend. Wells Fargo & Company (NYSE: WFC) cut 26,000 jobs. Financial firms are under pressure as interest rates rise. Wells Fargo has also been plagued by scandal.

Challenger also said the retail sector continues to be in trouble. Retail layoffs were 7,350 in October, which brings the annual total for the sector this year to 92,375 Several big-box retailers are in a battle with one another for market share. Amazon.com Inc’s (NASDAQ: AMZN) success looms as an ongoing major challenge.

Commenting about the month, Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc, said that the Verizon, Wells Fargo cuts, along with the bankruptcy of Toys “R” Us are part of an ongoing trend, “All three of these companies are in industries facing serious disruptions, requiring companies to pivot to meet consumer demand. Buyout offers are a significant indicator that while companies are attempting to cut costs, they are also in a position to help facilitate the change process and take care of their workers.”

One thing is for certain which is that the job picture is mixed. What is open is whether job addition can stay ahead of layoffs.

Top Five Industries Year to Date

Industry 2018 2017
Retail 92,735 72,600
Telecommunications 59,518 13,091
Financial 41,036 13,276
Health Care/Products 35,143 31,134
Consumer Products 29,206 12,932

Month-by-Month Totals

Month 2018 2017
January 44,653 45,934
February 35,369 36,957
March 60,357 43,310
April 36,081 36,602
May 31,517 33,092
June 37,202 31,105
July 27,122 28,307
August 38,472 33,825
September 55,285 32,346
October 75,644 29,831
November 35,038
December 32,423
TOTAL 441,702 418,770