September Job Losses Second-Highest of 2018 on Wells Fargo Cuts

The outplacement firm of Challenger, Gray & Christmas on Thursday released its job-cuts report for September, showing that a total of 55,285 job cuts were announced last month. That was an increase of 43.7% month over month and the second-highest total of the year to date. More than 60,000 job cuts were made in March, the highest monthly total since April 2016. Year over year, last month’s firings were 70.9% higher than in September 2017.

Almost half (47.9%) of the September job cuts were attributed to the Wells Fargo’s plan to reduce its workforce by 5% to 10% over the next three years. Challenger used the higher figure to calculate planned cuts of 26,500 from the big bank’s current employment level of 265,000.

All told, the financial industry reported plans in September to shave 27,343 jobs. The industry with the second-highest number of announcements last month was retail, reporting that 5,907 jobs will be lost. For the first nine months of 2018, the retail industry has offered plans to cut 85,385 jobs, the most of any industry and far ahead of the second-place financial industry, which has announced 38,935 cuts.

For the first nine months of the year, employers have slashed 366,058 jobs, compared to a total of 321,478 in the first nine months of last year, an increase of 13.9%. In the third quart of this year, firms announced 120,879 job cuts, a 15.3% year-over-year increase.

John Challenger, the outplacement firm’s CEO, said:

As the job market remains near full employment and companies struggle to find workers, large-scale job cut announcements like the one from Wells Fargo will actually provide the workers necessary for companies to gain momentum and sustain growth. With the exception of Wells Fargo, low job cut announcements indicate employers are holding on to their staff in a period of expansion

The industry announcing the third-highest number of job losses in September was industrial goods manufacturing. The manufacturers said they plan to cut 2,235 jobs. For the year to date, manufacturing job losses total 20,699, a third more than for the same period a year ago.

New hiring announcements totaled 6,879 in September, not including a total of nearly 600,000 announced seasonal jobs that Challenger, Gray has tracked so far this year.

Including seasonal hires, companies have announced plans to add 856,669 jobs in the first nine months of the year, down 13.8% from the 993,749 announcements for the same period last year.

For the year to date, California (80,842), New Jersey (40,188) and Texas (24,330) have lost the most jobs.

The top three reasons given for the 2018 job cuts are restructuring (156,779), the business is closing (111,600 jobs lost) or bankruptcy (33,378). Corporate cost-cutting initiatives have cost 25,176 jobs so far this year.

On Friday the U.S. Department of Labor is expected to report that U.S. employers added 180,000 jobs in September, well below the August total of 201,000 new jobs. ADP’s employment report released Wednesday showed job growth of 230,000 in September, sharply above August’s revised total of 168,000.