March Job Cuts Plunge 86% to 33-Month Low

The outplacement firm of Challenger, Gray & Christmas on Thursday reported that U.S. firms announced 30,603 job cuts in March, a drop of 86% from the cuts announced in March 2020. The total fell by 11% month over month.

Last March marked the beginning of the massive job cuts related to the COVID-19 pandemic. A total of 222,288 job cuts were announced last March, pushing the total number of announcements for the first quarter of 2020 to 346,683.

In contrast, job cuts announced for the first quarter of this year totaled 144,686, a decline of 58% year over year. For all of 2020, more than 2.3 million job cuts were announced, almost three times the 592,556 jobs lost in all of 2019.

Andrew Challenger, vice-president of the outplacement firm, noted, “It appears we have entered a recovery phase where job eliminations are slowing and companies are able to predict and assess where growth will occur.”

Nearly half of the 2.3 million job cuts announced in 2020 were directly attributed to the COVID-19 pandemic. In March, just 1,076 were attributed to the pandemic, bringing the year-to-date total to 6,893.

Industry sectors hit hardest in March were telecom (5,155 announced cuts), services (4,418 cuts) and entertainment/leisure (2,344 cuts). In the first three months of 2021, job cuts have been highest in aerospace/defense (31,073), telecommunications (24,157) and retail (11,932).

On the other side of the ledger, U.S. firms in March announced plans last month to hire 97,767 new workers. In the first quarter of this year, employers have announced plans to hire 316,233 new employees. That’s a year-over-year decline of 66% from the same period a year ago. In March of 2020, employers announced plans to hire 824,610, bringing the quarterly total to 936,041.

Washington-based employers announced the most job cuts in March with 6,133 planned cuts. California (4,051 planned cuts), Illinois (3,516), Texas (2,636) and Michigan (1,627) round out the five states losing the most jobs last month.

Challenger also tracks news industry cuts as a subset of media job losses. Newsrooms cut 874 jobs in the first quarter, including 542 jobs in March. That’s down 37% from the 1,390 cuts through March of last year. Newsrooms cut 16,160 jobs in 2020, the highest total on record and up 13% from the previous high of 14,265 in 2008. Cuts include digital, print and broadcast news.

Wednesday morning, ADP reported that private sector payrolls increased month over month in March by 517,000, short of the consensus expectation for a gain of 525,000. The weekly report on new claims for unemployment benefits due out later Thursday morning estimates 679,000 new claims were filed in the week ending March 27. The monthly employment situation is due Friday morning and analysts expect nonfarm payrolls to rise by 625,000 month over month and the unemployment rate for February to drop from 6.3% to 6.0%.

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