US Employers Slashed 222,000 Jobs in March

The outplacement firm of Challenger, Gray & Christmas on Thursday released its job-cuts report for March. It showed that 222,288 planned U.S. job cuts were announced in the month, a surge of 292% from the 56,660 cuts announced in February. Compared with cuts announced in March 2019, this year’s total is 267% higher than the 60,587 announced job cuts.

A total of 141,844 job cuts were attributed to the coronavirus outbreak and the forced shutdowns of nonessential businesses. Industry sectors hit hardest were entertainment/leisure (83,234 announced cuts), automotive (11,991) and services (8,430).

For the first three months of the year, announced job cuts of 346,863 are 82% higher than cuts for the same period in 2019. Employers announced 592,566 job cuts in all of 2019, a year-over-year increase of 10%. Announced cuts in the first quarter of 2020 are equal to 58.5% of job cuts made in all of 2019.

Andrew Challenger, vice president of the outplacement firm, said, “The virus has caused total whiplash for HR, hiring managers, and recruiters. The labor data for February showed a strong economy with a tight labor market. Companies were fighting for talent across industries. Now, millions of workers have filed for unemployment, companies have frozen hiring, and in many cases, cut operations or closed completely.”

Challenger also commented on an unexpected positive impact of the coronavirus outbreak: “The pandemic has created an opportunity for grocers and food delivery services, as well as consumer products delivery services, to thrive right now. The issue is whether they can find the workers to do jobs that now come with inherent risks that did not previously exist.”

U.S. firms in March announced plans to hire 824,610 workers, virtually all as a response to the coronavirus pandemic. Delivery service Instacart plans to hire 300,000 drivers, Walmart Inc. (NYSE: WMT) plans to hire 150,000 retail associates and Inc. (NASDAQ: AMZN) wants to hire 100,000 warehouse workers. All told, 821,810 of March new hiring announcements (99.7%) were related to the COVID-19 outbreak.

The entertainment/leisure sector announced the most cuts last month, displacing the tech sector, which had the most announced cuts in the first two months of the year. The leisure sector announced plans in March to trim 93,193 jobs, an increase of nearly 1,000% compared with February 2019. For the year to date, the entertainment/leisure sector has announced 96,887 job cuts.

The services sector announced total March job cuts of 37,854, the second-highest sector total for the month. Job losses in the sector were up sharply in the first quarter of 2020. In the same period last year, 4,808 job cuts were announced, compared with 40,743 cuts this year, a jump of nearly 750%.

The industrial goods (manufacturing) sector has announced 20,028 job cuts so far in 2020, including 10,799 in March. Last year, the sector reported planned cuts of 2,197 jobs in March. For the year to date, planned job losses in the manufacturing sector are down by 41%.

New York-based employers announced the most job cuts in March (30,873). New Jersey (26,984), California (23,486), Texas (16,884) and Ohio (15,481) round out the five states losing the most jobs in March.

Thursday morning, the U.S. Bureau of Labor Statistics is expected to report that new claims for unemployment benefits rose to 3.35 million last week. In the previous week, new claims rose by 3.28 million, more than five times the prior all-time high.