The Economy

U.S. Job Cuts Running 19% Ahead of 2014

While job cuts are on pace to reach a six-year high in 2015, fewer oil-related layoffs are expected next year.
Matthew HellerDecember 22, 2015

Job cuts are still on track to reach a six-year high in 2015, reflecting in large part the downturn in oil prices. But the pace of downsizing should slow next year, according to a new report.

The global outplacement consultancy Challenger, Gray & Christmas said employers announced 574,888 planned job cuts through November, 19% more than the 2014 year-end total. At the current rate, there will be more job cuts in 2015 than in any year since 2009.

Nearly one in every five of the job cuts (102,738) so far this year was caused by falling oil prices.

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“Cuts related to oil prices were heaviest in the first half of year, dropping by more than 50 percent in the second half.  With oil prices expected to remain low for the foreseeable future, we could continue to see the industry workforce shrink in 2016, though probably not at the rate we saw in the first part of 2015,” John A. Challenger, chief executive officer of Challenger Gray, said in a news release.

Even if job cuts don’t fall to post-recession lows next year, he added, increased hiring and wages are expected to offset the losses.

Non-farm payrolls grew by an average of 210,000 jobs per month through November, according to the U.S. Department of Labor, down from the 260,000 new jobs averaged per month in 2014.

“Part of the slowdown in job creation last year may have been related to a weakened energy sector,” Challenger said. “However, another contributor to the slower job gains this year may have been a shrinking supply of available talent.”

Last month, the unemployment rate for those with a four-year college degree was 2.5%, which means, Challenger said, “employers seeking college educated, experienced workers are really struggling right now to find candidates to fill openings.  That … could very well be bringing down the number of monthly net job gains.”