May Job Cuts Down 40% From April Record
U.S. employers announced 397,016 job cuts in May, a drop of 40.8% from April’s all-time record of 671,129 job losses. The May total claims the distinction of being the second-highest total ever recorded.
The outplacement firm of Challenger, Gray & Christmas on Thursday released its job-cuts report for May. Year over year, this year’s total was 578% higher than the 58,577 job cuts announced in May 2019. The April job losses were more than 1,500% higher than the year-ago total.
A total of 209,470 of the May cuts were attributed to the coronavirus outbreak and the forced shutdowns of nonessential businesses. Another 50,172 were attributed to sharply decreased demand. Industry sectors hit hardest in May were entertainment/leisure (163,680 announced cuts), retail (67,089) and services (34,229).
For the first four months of the year, announced job cuts of 1.41 million are 390% higher than cuts for the same period in 2019. Employers announced 592,566 job cuts in all of 2019. The year-to-date total is just 32,000 short of the highest full-year total ever (2002).
Andrew Challenger, vice president of the outplacement firm, said, “Although we saw a significant drop in May over April, we are still in record territory and the cumulative number of cuts since the pandemic began is staggering.”
Challenger added, “The longer people are out of work, the less money they have to spend. The longer people feel unsafe going out and spending, the less likely many small and midsize businesses will keep people on the payroll. As states and cities re-open, we can expect to see these numbers decrease as more people return to work. But many lost jobs will not return soon, if ever.”
U.S. firms in April announced plans to hire 38,981 workers, compared to an April total of more than 285,000 and a March total of more than 820,000. All told, 32,000 of May’s new hiring announcements (82%) were related to the COVID-19 outbreak.
California-based employers announced the most job cuts in May, with 202,390 planned cuts. New York (23,452), Washington (18,498), Pennsylvania (13,195) and Texas (13,057) round out the five states losing the most jobs in May.
To date in 2020, the COVID-19 pandemic has accounted for 984,073 job cuts, about 70% of all jobs lost.
On Wednesday, ADP reported that April payrolls fell by 2.76 million, a far cry from the revised total of 19.6 million jobs lost in April.