Job Cuts Hit 8-Month High Of 61,887
By Challenger, Gray & Christmas Inc.
Planned Layoffs Surge 53% in May
CHICAGO, May 31, 2012 –In May, the nation’s employers announced plans to cut 61,887 workers from their payrolls, the most since last September when layoffs totaled 115,730, according to the latest job-cut report released Thursday by global outplacement firm Challenger, Gray & Christmas, Inc.
The May job-cut total was up 53 percent from the 40,559 planned layoffs announced in April. It was 67 percent higher May 2011, when employers announced job cuts totaling 37,135. This marks the fourth year-over-year increase in monthly job cuts in 2012.
Overall, employers have announced 245,540 job cuts since January 1. That is up 20 percent from the 204,374 planned cuts announced from January through May 2011. The year-to-date total is five percent lower than the 258,319 job cuts announced in the first five months of 2010 and significantly (70 percent) lower than the 822,282 job cuts during the same period in 2009.
May job cuts were dominated by the computer industry, which saw 27,754 announced cuts; 27,000 of which resulted from the long-anticipated workforce reduction plans announced by computer maker Hewlett-Packard. The computer-industry total was more than five times greater than the second-ranked transportation industry, which announced 5,419 job cuts during the month.
Not only did the computer sector lead all other industries in May job cuts, but the HP layoffs propelled the industry into the top spot among the biggest job cutters for the year. To date, computer firms have announced 32,599 job cuts, a sizable increase from the 2,301 planned cuts announced by these companies in the first five months of 2011.
“We may see more job cuts from the computer sector in the months ahead. While consumers and businesses are spending more on technology, the spending appears to favor a handful of companies. 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,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Technology is not the only area where consumer trends are impacting workforce levels. Job cuts in the food industry are up 75 percent this year to 9,938 and a large layoff announcement may be on the horizon. Hostess Brands, the maker of Twinkies, Ding Dongs and Wonder Bread, has struggled to adapt to American’s healthier eating habits. Earlier this year it filed for Chapter 11 bankruptcy protection and in May sent notices to all 18,500 workers that their jobs may be displaced by plant closings, the sale of the company, the liquidation of the company or other restructuring measures. At this point, no official layoff actions have been initiated or announced and, therefore, not included among in Challenger’s figures.