October Job Cut Total Is Highest Since July 2015
The outplacement firm of Challenger, Gray & Christmas on Thursday released its job-cuts report for October. It showed that a total of 75,644 job cuts were announced last month, an increase of 37% month over month, the highest total of the year to date and the highest since July 2015. Year over year, last month’s firings were 153.6% higher than in October 2017.
More than half (58.2%) of the October job cuts were attributed to Verizon’s offer of voluntary severance packages to 44,000 salaried employees. Last month, Wells Fargo announced a plan to shave 26,000 jobs. Including 33,000 jobs lost in March following the Toys “R” Us bankruptcy filing, this is the third month in 2018 when one company has accounted for the bulk of monthly job cuts.
All told, the telecom industry reported plans in October to eliminate 46,616 jobs. The industry with the second-highest number of announcements last month was retail, reporting that 7,350 jobs will be lost. For the first nine months of 2018, the retail industry has reported plans to cut 92,735 jobs, the most of any industry and well ahead of the second-place telecom industry, which has announced 59,518 cuts.
For the first nine months of the year, employers have slashed 441,702 jobs, compared to a total of 351,309 in the first nine months of last year, an increase of 25.7%.
Andrew Challenger, vice president of the outplacement firm, said:
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. The good news for those accepting offers is now is a good time to look for a new job, especially if they act quickly. The increase in job cut announcements could indeed indicate we’re heading toward a downturn, although employers are still holding on to their workers for the most part.
The industry announcing the third-highest number of job losses in October was financial services. The firms said they plan to cut 2,101 jobs. For the year to date, financial services job losses total 41,036, more than 200% higher than in the same period a year ago.
New hiring announcements totaled 5,456 in October, not including a total of 714,000 announced seasonal jobs that Challenger, Gray has tracked so far this year.
Including seasonal hires, companies have announced plans to add 987,007 jobs in the first nine months of the year. In all of 2017, employers added 1.1 million jobs.
For the year to date, California (83,462), New York (72,123) and New Jersey (41,422) have lost the most jobs.
The top three reasons given for the 2018 job cuts are restructuring (165,193 jobs cut), the business is closing (123,795 jobs lost) or voluntary severance (46,100). Corporate cost-cutting initiatives have cost 26,666 jobs so far this year. On Wednesday, General Motors announced a voluntary severance package offer to about 18,000 salaried employees.
On Friday the U.S. Department of Labor is expected to report that U.S. employers added 180,000 jobs in October, well above the September total of 121,000 new jobs. ADP’s employment report released Wednesday showed job growth of 227,000 in October, somewhat better than September’s revised total of 218,000.