January Layoffs Up 21% to 53,000

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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.

Challenger added:

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.

Industry 18-Jan 18-Dec 19-Jan
Aerospace/Defense 295 3,271 1,735
Apparel 0 0 122
Automotive 703 2,058 3,949
Chemical 65 151 247
Construction 69 0 95
Consumer Products 7,158 949 2,074
Education 135 603 58
Electronics 571 241 0
Energy 1,129 717 247
Entertainment/Leisure 440 1,591 3,533
Financial 637 848 4,230
FinTech N/A N/A 186
Food 1,286 2,409 1,339
Government 328 1,157 661
Health Care/Products 6,531 4,665 1,780
Industrial Goods 964 2,684 2,283
Insurance 428 0 370
Legal 0 0 0
Media 855 3,599 1,279
Mining 153 60 144
Non-Profit 36 193 53
Pharmaceutical 976 5,135 539
Real Estate 55 110 78
Retail 15,378 2,059 22,327
Services 3,212 6,352 2,530
Technology 756 1,008 638
Telecommunications 951 50 461
Transportation 1,472 3,463 1,315
Utility 70 84 0
Warehousing 0 427 715
TOTAL 44,653 43,884 52,988

Source: Challenger, Gray & Christmas Inc.