U.S. Job Cuts Increase 19% in July to 45,346

Layoffs have risen for two straight months, with the energy sector contributing an unexpected resurgence last month.
Matthew HellerAugust 4, 2016

Layoffs across the United States rose for a second straight month in July, reflecting in part a surprisingly large increase in energy sector job cuts.

The global outplacement consultancy Challenger, Gray & Christmas said U.S.-based employers announced plans to trim payrolls by 45,346, up 19% from the 38,536 job cuts announced in June. The June total was up 28% from May, when planned layoffs fell to a five-month low of 30,157.

But the pace of job cuts this year is still relatively low. To date, employers have announced 359,100 job cuts in 2016, down 8.7% from the 393,368 job cuts announced from January through July 2015.

Job cuts surged to a 4-year high of 105,696 in July 2015, due to heavy cuts in the military, where 57,000 troops and civilian personnel were discharged in budget-cutting initiatives.

“While job cuts were up last month, compared to June, the total was still lower than the July average recorded since the end of the recession,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a news release.

“We did see a resurgence in energy-sector job cuts,” he added, noting that was “somewhat unexpected in light of recent projections of increased oil prices and possible labor shortages in the industry.”

Job cuts in the energy sector totaled 17,725 in July, a 796% increase from the previous month (1,979) and the largest job-cut tally for the industry since April. So far in 2016, energy firms have announced 94,936 job cuts, up 37% on a year ago.

Challenger cited a report in the trade publication that said the number of oil rigs rebounded in May and predicted that firms will have a difficult time ramping up operations if and when oil and gas prices go up.

“Not only have laid off workers relocated to other areas for new jobs but, just as in many other industries, a large portion of the workforce is reaching retirement age,” Challenger said.

After the energy sector, the computer industry has seen the next highest number of job cuts (49,464) this year.