Retail, Energy Lead Surge in U.S. Job Cuts

Employers reported 75,114 planned layoffs in January, up 218% on December and 42% on the year-ago period.
Matthew HellerFebruary 5, 2016

After hitting a 15-year low in December, U.S. job cuts surged last month amid heavy downsizing in the retail and energy industries, according to a new report.

The global outplacement consultancy Challenger, Gray & Christmas said employers reported 75,114 planned layoffs in January, up 218% on December and 42% on the year-ago period. It was the highest monthly tally since July 2015, when cuts reached 105,696.

Despite relatively strong holiday sales to close out 2015, retailers led all other industries in January job cuts, announcing plans to cut 22,246 jobs from their payrolls — the highest retail total since January 2009. Wal-Mart and Macy’s accounted for most of the cuts.

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On the energy side, companies reported 20,246 layoffs, up from 1,682 in December and the highest monthly total since the plummet in oil prices began in late 2014.

“The pace of downsizing in the energy sector ebbed in the second half of 2015, but the latest activity, which included more cuts from Halliburton and Schlumberger, is evidence the industry is far from concluding its cost-cutting initiatives,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a news release.

“With oil prices expected to stay low for the foreseeable future, the potential for continued layoffs remains elevated,” he added.

Since the oil price slump began, Halliburton has announced 22,000 job cuts while Schlumberger has reported more than 30,000 layoffs.

Challenger noted that e-commerce is taking a growing share of retail sales gains, with Macy’s, for example, reporting that holiday 2015 sales at its brick-and-mortar stores fell by about 5%, while orders through its online platforms were up 25%.

“This shift is making it necessary for retailers like Macy’s and Walmart to rethink their strategy; moving away from traditional stores and investing more into Internet sales,” Challenger said. “Unfortunately, this shift is resulting in widespread job cuts across the industry, even in times of good health.”

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