Published On: Thu, Jan 3rd, 2013

Job Cuts Drop to Second Lowest Total of 2012

32,556 December CUTS down 43% from November; annual total lowest since 1997

By Challenger, Gray & Christmas Inc.

CHICAGO, January 3, 2013 – After three consecutive months of  increased layoff activity, the number of  planned job cuts announced in December plunged to 32,556, the second lowest monthly total of 2012.  Overall, the year ends with the lowest 12-month job-cut total since 1997, according to the latest report from global outplacement consultancy Challenger, Gray & Christmas, Inc.

The 32,556 planned job cuts announced last month were 43 percent fewer than the 57,081 November cuts.  The December total was 22 percent lower than a year ago, when employers announced 41,785 in the final month of the year.  The only month in 2012 to see fewer job cuts than December was August, when job cuts totaled 32,239.

Despite the December decline, planned layoffs in the fourth quarter were up 33 percent from the previous quarter.  Employers announced 137,361 job cuts in the final three months of year, compared to 102,910 in the third quarter.  The third-quarter total was the lowest quarterly total since 81,568 job cuts were announced in the second quarter of 2000.

Due in large part to the slow pace of downsizing in the third quarter, annual job cuts totaled 523,362, which is the lowest year-end total since 1997, when employers announced 434,350 job cuts during the year.  The 2012 total was 14 percent lower than the 606,082 job cuts announced in 2011.

“We saw a few spikes in monthly job cuts in 2012 and there were some significant mass layoffs that definitely reminded us that not every industry is enjoying the fruits of recovery.  However, the overall pace of downsizing was at its slowest since the end of the recession.  In fact, we have not seen this level of job cutting since before the dot.com collapse and subsequent 2001 recession,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

One of these significant mass layoffs occurred in December, when banking giant Citigroup announced 11,000 job cuts early in the month.  The Citigroup announcement accounted for the majority of the 11,355 job cuts announced last month in the financial sector, which was the top job-cutting sector in December.  The transportation sector was a distant second with 4,844 job cuts.

The leading job-cut sector for the year was the computer industry, with a total of 46,164 announced layoffs since January.  That marks a 215 percent increase from 2011, when these firms announced 14,677 job cuts.    It is worth noting that nearly 60 percent of the computer cuts in 2012 were the result of the May job-cut announcement from Hewlett-Packard impacting 27,000 workers.

The transportation sector, which was the second leading job-cut sector in December, was also the second largest job cutter for the year.  The 42,107 job cuts announced by these firms in 2012 were up 189 percent from 14,584 planned cuts in 2011.

While a handful of industries experienced increased downsizing in 2012, several sectors, including construction, retail, financial services, and aerospace and defense saw decreased job-cut activity.  Perhaps the most dramatic decline occurred in the government sector, where job cuts plunged 90 percent from an industry-leading 183,064 in 2011 to just 19,128 in 2012.

“The fact that the top job-cutting industry in 2011 shed nearly 190,000 workers while the top job cutter this year did not even crack 50,000 reveals a lot about where we are in this recovery.  Despite the uncertainty related to the fiscal cliff, which has now been averted thanks to a last-minute deal, employers held steady in the final months of the year and avoided a surge in mass layoffs,” said Challenger.

“Of course, we are hardly out of the woods.  The deal struck on Tuesday will do little to impact the nation’s soaring debt and new battles over the debt limit and broader government spending cuts still lie ahead.  As a result, the country’s employers may still lack the confidence to move forward with more aggressive hiring plans in 2013,” he added.

According to the latest available data from the Bureau of Labor Statistics, private-sector payrolls achieved net gains averaging 154,000 new workers each month through November 2012.  Overall, private-sector employment increased by 1,697,000 new workers from January through November.  That remains well off the pre-recession peak, which in 2005, saw private-sector payrolls increase by an average of 193,000 new workers per month for an annual total of 2,312,000 new jobs.

“Friday’s report on December employment could show a hiring boost from construction and other new jobs related to post-hurricane clean-up efforts on the East Coast.  Late holiday season hiring may also show up in retail employment numbers.  However, with one report indicating that holiday retail sales were weaker than expected, we could see a purging of retail workers in future employment reports,” said Challenger.

“This seasonal house-cleaning in the retail sector is unlikely to show up in our job-cut tracking, since most of the jobs were temporary in nature and the cuts go unannounced.  However, we could see plenty of early-year job cuts announced in other sectors.  Historically, January is, on average, the biggest job-cut month of the year, and several sectors, including computer, financial services, consumer products, transportation and aerospace and defense are at risk due to a high potential for reduced spending by consumers, businesses and government in 2013,” Challenger noted.

In 20 full years of tracking since 1993, January has been the top job-cut month of the year nine times.  The next closest month is December, which has been the top job-cut month just three times.  Since 1993, job cuts have averaged 101,084 in January.  The second largest monthly average over the same period is 80,321 job cuts in October.

 

TOP FIVE INDUSTRIES

Year To Date

     

2012

2011

 
Computer

46,164

14,677

Transportation

42,107

14,584

Financial

41,008

63,624

Food

37,033

16,943

Health Care/Products

36,212

27,373

MONTH BY MONTH TOTALS

2012

2011

 

January

53,486

38,519

February

51,728

50,702

March

37,880

41,528

April

40,559

36,490

May

61,887

37,135

June

37,551

41,432

July

36,855

66,414

August

32,239

51,114

September

33,816

115,730

October

47,724

42,759

November

57,081

42,474

December

32,556

41,785

TOTAL

523,362

606,082

 

Some reductions are identified by employers as workers who will take early retirement offers or other special considerations to leave the company.

 

LAYOFF LOCATION

Year to Date

California

77,984

Texas

63,917

New York

60,060

Michigan

28,587

Illinois

26,163

Listings are identified by the location of the layoff or corporate headquarters as stated in announcement.

 

Copyright 2013 Challenger, Gray & Christmas, Inc.

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

 

JOB CUTS BY INDUSTRY

 

Dec 2011

Nov 2012

Dec 2012

Jan-Dec 2011

Jan-Dec 2012

Aerospace/Defense

405

1,456

803

34,759

19,026

Apparel

190

757

150

1,591

2,781

Automotive

846

1,315

757

10,593

24,092

Chemical

679

474

239

3,601

7,198

Commodities

300

625

414

1,399

Computer

79

3,313

1,104

14,677

46,164

Construction

2,377

70

599

12,710

3,556

Consumer Products

904

422

1,610

20,110

34,133

Education

1,351

475

49,250

30,925

Electronics

1,380

2,920

400

8,879

15,191

Energy

650

3,767

1,812

16,700

26,813

Entertainment/Leisure

905

1,184

601

15,626

13,906

Financial

7,433

1,203

11,355

63,624

41,008

Food

1,273

19,709

270

16,943

37,033

Government

2,183

2,420

1,550

142,503

19,128

Health Care/Products

3,561

5,803

1,960

27,373

36,212

Industrial Goods

6,621

1,083

1,222

26,505

26,103

Insurance

532

239

5,434

8,355

Legal

11

80

3,480

1,011

Media

896

938

266

7,720

5,641

Non-Profit

128

174

39

3,050

1,659

Pharmaceutical

1,329

1,300

1,264

21,580

14,150

Real Estate

1,244

325

Retail

2,608

1,527

22

50,946

32,868

Services

1,451

534

58

14,005

7,810

Telecommunications

3,305

1,543

921

13,482

21,858

Transportation

1,664

2,879

4,844

14,584

42,107

Utility

75

75

155

4,699

2,910

TOTAL

41,785

57,081

32,556

606,082

523,362

Copyright 2013 Challenger, Gray & Christmas, Inc.

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

 

JOB CUTS BY REGION, STATE

 

East

DEC

YTD

New York

14,835

60,060

Pennsylvania

338

15,674

New Jersey

15,618

Massachusetts

789

8,367

Maryland

7,056

Connecticut

282

5,969

Dist. of Columbia

337

2,479

Delaware

2,203

Maine

25

891

Rhode Island

796

New Hampshire

34

528

Vermont

217

TOTAL

16,640

119,858

 

South

DEC

YTD

North Carolina

536

22,160

Florida

354

17,130

Kentucky

548

10,076

Georgia

256

9,408

Virginia

1,298

8,131

Tennessee

100

7,465

Alabama

538

5,768

Louisiana

394

4,090

Arkansas

118

3,707

West Virginia

147

3,109

South Carolina

29

2,263

Mississippi

80

1,144

TOTAL

4,398

94,451


Copyright 2013 Challenger, Gray & Christmas, Inc.

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

 

JOB CUTS BY REGION, STATE

Midwest

DEC

YTD

Michigan

560

28,587

Illinois

247

26,163

Ohio

754

19,298

Minnesota

4,615

18,799

Wisconsin

44

9,547

Missouri

140

9,164

Indiana

570

6,119

Kansas

30

4,316

Iowa

75

1,762

Nebraska

1,175

TOTAL

7,035

124,930

West

DEC

YTD

California

1,143

77,984

Texas

881

63,917

Washington

226

13,625

Arizona

590

6,695

Nevada

100

5,937

Oregon

178

4,517

Colorado

254

2,315

Oklahoma

375

2,056

New Mexico

1,720

Utah

1,568

Idaho

430

1,490

North Dakota

764

Montana

92

422

Hawaii

376

Alaska

365

South Dakota

214

306

Wyoming

66

TOTAL

4,483

184,123

Copyright 2013 Challenger, Gray & Christmas, Inc.

 

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

 

JOB CUT REASONS

 

December

YTD

Restructuring

11,111

189,724

Closing

3,169

115,981

Cost-Cutting

3,956

75,539

Bankruptcy

210

39,722

Economic Conditions

11,000

27,778

Demand Downturn

80

20,632

Merger/Acquisition

1,170

18,312

Voluntary Severance

275

9,923

Loss of Contract

454

9,212

Relocation

22

3,518

Competition

2,914

Falling Sales

1,900

Privatization

1,890

Technological Update

1,282

Natural Disaster

1,009

Government Regulation

893

Legal Trouble

725

Outsourcing

714

Hurricane Sandy

700

700

Fiscal Cliff

400

400

Funding Loss

345

Firing

125

Order Cancellation/Reduction

68

Labor Dispute

20

Fire

20

Health Reform

9

9

Reorganization/Consolidation

7

TOTAL

32,556

523,362

Copyright 2013 Challenger, Gray & Christmas, Inc.


CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

 

QUARTER-BY-QUARTER

Q1

Q2

Q3

Q4

TOTAL

1989

9,850

10,100

24,085

67,250

111,285

1990

107,052

87,686

49,104

72,205

316,047

1991

110,056

76,622

147,507

221,107

555,292

1992*

110,815

85,486

151,849

151,850

500,000

1993

170,615

84,263

194,486

165,822

615,186

1994

192,572

107,421

117,706

98,370

516,069

1995

97,716

114,583

89,718

137,865

439,882

1996

168,695

101,818

91,784

114,850

477,147

1997

134,257

51,309

95,930

152,854

434,350

1998

139,140

131,303

161,013

246,339

677,795

1999

210,521

173,027

173,181

118,403

675,132

2000

141,853

81,568

168,875

221,664

613,960

2001

406,806

370,556

594,326

585,188

1,956,876

2002

478,905

292,393

269,090

426,435

1,466,823

2003

355,795

274,737

241,548

364,346

1,236,426

2004

262,840

209,895

251,585

315,415

1,039,735

2005

287,134

251,140

245,378

288,402

1,072,054

2006

255,878

180,580

202,771

200,593

839,822

2007

195,986

197,513

194,095

180,670

768,264

2008

200,656

275,292

287,142

460,903

1,223,993

2009

578,510

318,165

240,233

 151,122

1,288,030

2010

181,183

116,494

113,595

118,701

529,973

2011

130,749

115,057

233,258

127018

606,082

2012

143,094

139,997

102,910

137,361

523,362

AVG

211,278

162,196

188,155

220,678

*Estimate based on half-year total. Challenger began tracking job-cut data in 1993.  Before that, it was tabulated by an independent newsletter no longer published.

 

 Copyright 2013 Challenger, Gray & Christmas, Inc.


CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

ANNOUNCED HIRING PLANS

 

Industry

12-Dec

2012

Retail

600

475,889

Automotive

13,002

32,968

Transportation

250

25,613

Financial

363

12,374

Industrial Goods

88

10,925

Computer

1,080

10,630

Health Care/Products

30

10,597

Entertainment/Leisure

100

6,850

Food

100

6,768

Services

300

6,694

Telecommunications

6,187

Aerospace/Defense

100

5,690

Energy

75

4,118

Pharmaceutical

2,469

Construction

37

2,213

Insurance

100

2,206

Government

1,862

Education

1,788

Consumer Products

20

1,724

Electronics

816

Commodities

630

Chemical

21

623

Media

287

Real Estate

257

Apparel

161

Non-Profit

123

Legal

15

TOTAL

16,266

630,477

  Copyright 2013 Challenger, Gray & Christmas, Inc.

CHALLENGER, GRAY & CHRISTMAS, INC.

JOB-CUT ANNOUNCEMENT REPORT

ANNOUNCED HIRING PLANS

MONTHLY TOTALS

 

2012

2011

January

7,568

29,492

February

10,720

72,581

March

12,390

10,869

April

11,794

59,648

May

7,722

10,248

June

12,314

15,498

July

10,350

10,706

August

12,079

15,201

September

425,683

76,551

October

75,065

159,177

November

28,526

63,527

December

16,266

14,074

TOTAL

630,477

537,572

 Copyright 2013 Challenger, Gray & Christmas, Inc.

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