In a worrying start to the year, major companies laid off 52,988 workers in January, up 20.7% from December and up 18.7% from January a year ago. The data show a mixed trend. Long term, January 2019 numbers were better than for most January stats in the past several years. However, compared to most monthly totals for the past two years, regardless of the month, the figure was weak, according to research firm Challenger Gray & Christmas.
In specific, January’s number is lower than the average of 86,347 cuts announced during the month of January since 1993. However, it is higher than 20 of the past 24 monthly totals.
Commenting on the trend Andrew Challenger, vice president at Challenger, Gray, said:
Employers are continuing the trend of reducing staff that we saw in the fourth quarter of last year, as several industries pivot to emerging technologies. Companies are battling economic uncertainty and, while consumer confidence was high, consumer spending missed estimates at major retailers during the holiday season.
This is among a growing body of evidence that the economy has started to slow. Consumer confidence dipped recently, according to sources like the Conference Board. Retail sales at many major chains were poor over the holidays. The earnings season has been mixed, with many companies missing targets. Trade relations with China have started to hurt both economies. A government shutdown shaved a meaningful amount from GDP growth for the first quarter.
The largest job cuts for the month were in the retail sector, and the sector itself did poorly. In fact, it leads all parts of the economy in job cuts during January with 22,327, which is 45% higher than last year. Gymboree’s plan to liquidate remaining stores in the United States and Canada accounted for roughly 10,000 jobs.
Financial firms announced the second-highest number of planned cuts with 4,230, followed by the Automotive sector, which announced 3,949, and Entertainment/Leisure companies that announced 3,533 planned cuts.
Source: Challenger, Gray & Christmas Inc.