Human Capital & Careers

Layoffs Surged for Past Three Months: Report

Challenger, Gray & Christmas reports three straight months of triple-digit job cuts; telecoms were hit especially hard
Stephen TaubDecember 8, 2004

Are mass layoffs coming back to 2002 levels?

Perhaps. Consider that on Tuesday, Colgate-Palmolive Co. announced a four-year restructuring that will include a reduction of 12 percent of its workforce, or about 4,400 jobs.

What’s more, General Motors Corp. said last week that it would lay off about 950 workers at its Linden, New Jersey, truck plant early next year.

Those two announcements seem to reflect a wider trend since the summer. According to a new study published by outplacement firm Challenger, Gray & Christmas Inc., employers in November announced plans to cut 104,530 jobs. That’s the third straight month in which planned job cuts exceeded 100,000. It’s also the first time that job cuts have exceeded 100,000 for three or more consecutive months since the January-to-April 2002 period.

Further, employers have announced 930,690 job cuts altogether so far in 2004. That, however, is a good deal less than the 1,143,406 layoffs announced during the first 11 months of last year.

Even so, if just 69,310 jobs are cut in December, it will be the fourth straight year with at least one million cuts, according to Challenger.

A closer look at the report’s data reveals another trend that evokes memories of the dismal job market in 2002. Just as they did then, job cuts have recently surged in the telecommunications industry, according to the report. In just the last three months, employers in that sector have announced 48,804 job cuts, accounting for half of all telecommunications job cuts this year.

“After a period of relative calm from mid-2003 through the first half of 2004, the telecommunications sector now appears to have entered a period of consolidation, which is having a clear impact on workforce levels,” said John Challenger, chief executive of the head hunting firm, in a statement. “Not only are more companies announcing job cuts, there are more jobs being eliminated in each announcement. This volatility could continue into 2005, as competition forces more companies to consider strategic combinations.”