Tech giant Cisco Systems is expected to announce plans to lay off 14,000 employees in the coming weeks, nearly one-fifth of its total headcount, according to technology news site CRN. These layoffs may be the result of the company’s aim to move away from hardware and into wireless security and data centers.
If these layoffs are announced, they would not be the first by a major company this year, nor would they be the largest. According to data compiled by outplacement firm Challenger, Gray & Christmas, Wal-Mart has announced the most job cuts so far this year, with plans to lay off a total of 17,500 employees.
In an interview with 24/7 Wall St., Challenger, Gray & Christmas CEO John Challenger explained that the number one cause of layoffs is poor financial performance. “Business drops, profitability drops, and [companies] have to cut costs. They don’t want to get caught with too many people and not enough business to support them.”
No industry has announced more job cuts in 2016 than the energy industry. U.S. oil currently trades at less than $50 a barrel, close to one-third of its price in 2008. Falling oil prices have weakened the industry in the U.S., and a number of companies have declared bankruptcy and closed refineries. The energy industry represents two of the four companies cutting the most jobs, with Halliburton and Schlumberger together cutting an estimated 25,000 jobs in 2016.
Layoffs do not always indicate poor financial performance. Many companies laying off employees are restructuring as they adapt to a changing marketplace. Over the past decade, the growing ubiquity of mobile technology and cloud computing has disrupted industries most consumer-facing industries, as well as a large share of the country’s biggest tech companies. The computer and retail industries have announced 49,464 and 43,618 job cuts, respectively this year, the second and third most of any industry.
As Challenger told 24/7 Wall St., “[Job] cuts in retail are signs of the fundamental change going on in the move to e-commerce.” Online retail sales accounted for 8.1% of total retail sales in the most recent fiscal quarter, roughly double the share seven years ago. As major retailers shift their focus to online sales, many employees at brick-and-mortar stores are at greater risk of losing their jobs. Macy’s is currently laying off three to four workers in each of its 770 stores, and has plans to close 100 locations in early 2017.
The technology industry is also undergoing major changes. Global PC shipments declined by 5.2% in the most recent quarter, the sixth consecutive quarter of decline. Meanwhile, smartphone sales have continued to grow. To keep up with shifting consumer demand, major technology companies are expanding their product lines and restructuring in the process. For example, hard drive manufacturer Seagate Technology recently acquired cloud storage company Dot Hill Systems in an attempt to diversity its business offerings. As part of a plan to restructure around the merger, Seagate recently announced it would be laying off a total of 8,100 employees by the end of 2017.
Challenger, Gray & Christmas provided 24/7 Wall St. with all job cut announcements affecting at least 1,000 positions in 2016. 24/7 Wall St. combined the planned cuts by company to identify the companies that announced the most job cuts so far this year. Only announcements made in 2016 were considered, and layoffs were only counted if they occurred at least partially in 2016, or are expected to occur in the future. Job cuts announced in 2016 but which only included positions cut in 2015 were excluded from the list. Job cuts did not need to be entirely within the United States. Total headcounts are from each company’s most recent annual report filed with the Securities and Exchange Commission.
These are the 14 companies cutting the most jobs.