Job Cuts Edge Up Slightly In October
37,986 PLANNED CUTS UP 2.2% FROM SEPTEMBER;
PACE OF DOWNSIZING REMAINS AT DECADE LOW
CHICAGO, November 3, 2010 - Downsizing activity remained flat in October, as employers announced job cuts totaling 37,986 during the month. That was 2.2 percent more than the 37,151 planned layoffs in September, according to the latest job-cuts report released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.
October marks the sixth month in the last seven in which fewer than 40,000 job cuts were announced. It was the tenth consecutive month this year that saw fewer job cuts than the same period a year ago. Last month's total was 32 percent lower than October 2009, when 55,679 job cuts were announced.
Overall, the pace of job cutting is down 62 percent from a year ago, with employers announcing 449,258 job cuts year to date, compared to 1,192,587 over the same period in 2009.
The heaviest downsizing in October was initiated by employers in the entertainment and leisure sector, where job cuts totaled 5,059. That was the largest number of job cuts in this sector since July 2008, when they reached 10,893. So far this year, entertainment and leisure companies announced 16,387.
The entertainment and leisure sector was followed closely by the government and non-profit sector, which has been the most prolific job cutter this year. These employers announced 4,749 in October. That is the lowest monthly job-cut total for the sector since January 2009 (2,298). Planned workforce reductions by government and non-profit to date total 128,218, which is down 20 percent from a 2009 ten-month total of 160,434.
"Job cuts are the lowest they have been in a decade, due in part to a slowly improving economy; if not the fact that many employers have basically cut their workforces to the bare minimum. Unfortunately, the lack of spending by consumers and businesses is stunting demand for new workers. The modest gains in business activity are currently being met by increasing hours of existing workers," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
"The problem is that consumer spending will not increase until more people have jobs. But businesses won't begin expanding production or hiring until there is more demand for their products and services. Increased government spending, while economically justified, has become politically unfeasible. So, right now, it is difficult to imagine what exactly will provide the spark for increased hiring and an accelerated recovery. Something has to provide that spark, though, or the economy will be stuck in mud for the foreseeable future," noted Challenger.