Labor Management

U.S. Job Cuts at Lowest Level Since December

The May total of job cuts was 27% lower than it was for the same month a year ago.
Matthew HellerJune 2, 2016

Layoffs across the United States dropped sharply in May, indicating job cuts may slow down this summer after heavy downsizing earlier in the year, according to a new report.

The global outplacement consultancy Challenger, Gray & Christmas said U.S.-based employers announced plans to trim payrolls by 30,157, down 53% from the 64,141 job cuts announced in April. The May total was the lowest for any month since December and 27% lower than the same month a year ago.

Employers have announced a total of 275,218 planned job cuts so far in 2016, up 13% from the year-ago period.

“May could be the start of a summer slowdown in the pace of job cutting as companies take a pause following the period of heavy downsizing that started the year,”John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a news release.

“Outside of the energy sector, summer can be a time when major business decisions are set aside as companies take stock of strategies initiated in the first quarter,” he added. “This is also a time when the general pace of business can slow as many employees, including key decision makers, take vacations and enjoy the fruits of their labor.”

Once again, monthly job cuts were led by the energy sector, with firms announcing another 7,572 layoffs in May. But that was 60% fewer than the 18,759 cuts in April.

Oil prices have rallied since the beginning of the year but are still less than half of what they were at oil’s recent peak.  “The recent gains may be enough to at least temporarily slow job cuts in the sector,” Challenger said.

In the computer industry, job cuts plunged 83%, from 17,015 in April to 2,836 in May, while those in the financial sector fell 68% after reaching a four-month high in April and retailers announced 75% fewer layoffs.

The current mixed economic signals “provide even more reasoning for companies to take a wait-and-see approach to their summer business strategy,” Challenger said.