Announced U.S. Job Cuts Jump 67% From Year Ago, Challenger Says
Job cuts announced in the U.S. jumped in May by the most in eight months, led by computer companies.
Planned firings surged 67 percent from May 2011 to 61,887, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc. It marked the fourth year-over-year increase so far in 2012.
Employers have announced 245,540 reductions since Jan. 1, 20 percent more than a year earlier, the report said. Hewlett- Packard Co. (HPQ) accounted for almost half the announcements this month, making the computer industry the top job-cutter of the year. Firings may also occur in the food industry as Hostess Brands Inc. restructures following its filing for bankruptcy protection, the report said.
“While consumers and businesses are spending more on technology, the spending appears to favor a handful of companies,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Those that are struggling to keep up with the rapidly changing trends and consumer tastes are shuffling workers to new projects or laying them off, altogether.”
Compared with April, job-cut announcements were up 53 percent. Because the figures aren’t adjusted for seasonal effects, economists prefer to focus on year-over-year changes rather than monthly numbers.
The computer industry led firings with 27,754 planned cuts in May, followed by 5,419 in transportation and 4,424 in financial businesses.
States Losing Jobs
Employers announced plans to take on 7,722 workers in May, fewer than the 11,794 the prior month and led by additions in the automobile industry, the report said.
Job creation in the world’s largest economy picked up last month, the Labor Department may report tomorrow. Payrolls climbed by about 150,000 workers after a 115,000 increase in April, according to the median forecast of economists surveyed by Bloomberg News. The unemployment rate probably held at a three-year low of 8.1 percent.
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 job 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.
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