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