Employers in U.S. Announce Most Job Cuts in Eight Months, Challenger Says
Employers in the U.S. announced plans in November to cut 48,711 jobs, the most in eight months, as government agencies trimmed payrolls.
Compared with the same month last year, planned firings dropped 3.3 percent, according to Chicago-based Challenger, Gray & Christmas Inc. This month’s downsizing marks the smallest year-over-year decline since May 2009 when job cuts increased by 7.4 percent from a year earlier.
While some companies are putting fewer workers on unemployment lines, others have yet to add jobs fast enough to bring down unemployment, which is close to a 26-year high. Budget woes that have prompted state and local governments to cut staff may spur similar decisions at the federal level after President Barack Obama’s deficit-cutting commission proposed a 10 percent reduction in the workforce.
“Job cuts that have been concentrated at the state and local level could expand to include federal workers in the new year,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Other sectors have seen significant declines in job cuts this year and, at the moment, there is little evidence of a possible resurgence in 2011.”
Compared with October, job-cut announcements rose 28 percent. Because the figures aren’t adjusted for seasonal effects, economists prefer to focus on year-over-year changes rather than monthly numbers.
Government and non-profit agencies led the November job cuts with 10,761 announced reductions, the seventh time this year it’s led all industries, according to Challenger. Consumer- product companies reported the next-largest number of cuts, with 8,748.
Ohio led all states with 10,353 announced job cuts, followed by New York, with 8,045.
Today’s report also showed that employers announced plans in November to hire 26,012 workers, down from 124,766 the prior month. Retail businesses led the gains, planning to add 15,900 workers.
A report from the Labor Department later this week may show companies added 155,000 jobs in November, according to the median forecast in a Bloomberg News survey of economists. The jobless rate probably held at 9.6 percent, the survey showed.
Federal Reserve policy makers remain concerned the economy isn’t growing fast enough to bring down unemployment. Economists forecast joblessness will exceed 9 percent through next year, according to a Bloomberg survey earlier last month. Central bankers in November announced they will inject another $600 billion into the financial system by June to help spur the recovery.
Governments This Year
Government and non-profit agencies have announced plans to let go of 138,979 workers this year, which is 177 percent more than the 50,168 firings by the pharmaceutical industry, the next biggest job cutter, according to Challenger.
Obama earlier this week proposed freezing the pay of about 2 million federal workers this fiscal year and next as a step toward reining in the budget deficit. The president’s deficit- cutting commission, which proposes reducing the government workforce, will vote Dec. 3 on whether to send a plan to Congress.
Staff reductions are expected at state and local government agencies. New York City, facing a $3.3 billion deficit in next year’s budget, will cut its workforce by more than 10,000 over the next year-and-a-half, Mayor Michael Bloomberg’s budget office said Nov. 18. More than 6,200 workers will be fired, and the remainder of the cuts will be made through attrition, his office said.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
Challenger’s data do not always correlate with figures on payrolls or first-time jobless claims as reported by the government. Many job cuts are carried out through attrition or early retirement. Some employees whose jobs are eliminated find work elsewhere in their companies and many announced staff reductions never take place because business improves. The totals also include foreign affiliates.
To contact the editor responsible for this story: Christopher Wellisz at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.