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Layoff announcements hit their lowest level since March 2008 last month, signaling market stabilization. Global outplacement consulting firm Challenger, Gray & Christmas Inc. put the number of cuts at 66,404 for September, a 13% decline from July's 76,456. Year-over-year, the number of layoffs announced is down 30%, and September was the fourth month in a row in which job cuts fell relative to the same month a year earlier.
Planned job cuts reached 240,233 for the third quarter of 2009, according to Challenger, its lowest level since the first quarter of 2008, when there were 200,656 planned layoffs. For the third quarter of this year, job cuts fell 24.5% from the previous quarter's 318,165, and it's off 16.3% from 287,142 in the third quarter of 2009. At the beginning of 2009, the planned layoff rate reached a seven-year high of 578,510. Since then, the planned layoff rate fell 58.5%.
Even with companies starting to shed fewer positions, 2009 is still on pace to exceed 2008's year-end job loss level of 1,223,993. Through September 2009, employers in the United States dropped 1,136,908 positions, up 49% from the September 2008 year-to-date total of 763,090.
Rick Cobb, executive vice president of Challenger, Gray & Christmas, says, "The downward trend in planned job-cut announcements is certainly a sign that employers feel more optimistic about future business conditions. Further evidence of this increased confidence was demonstrated earlier this week by a spate of merger activity. It could be a while before this increased confidence results in job creation, but we are going in the right direction."
The automotive sector felt the worst of the September job cuts, with 22,114 layoffs announced -- the highest since 24,172 jobs were cut in April. This year, companies in the auto sector have announced planned layoffs of 151,020, just off the record of 158,766 set in 2006. The government and non-profit market exceeded the auto industry, though, with 155,602 intended to be eliminated this year. Yet, this is still not as severe as the 177,215 jobs lost in this sector in 2003.
Cobb continues, "State and local governments are in a precarious situation. They are seeing their costs increase as more unemployed citizens rely on government-sponsored safety-net programs." He also notes, "These governments' income streams from income taxes, property taxes and corporate taxes are shrinking. We could continue to see heavy downsizing in this sector for several more months, until employment in these cities and states begins to recover."
Meanwhile, some sectors are improving. Industrial goods had 104,029 layoffs for the first three quarters of this year, with only 13,664 jobs cut in the third quarter -- compared to 60,332 in the first quarter. Retail job cuts were down 87% from the first quarter to the third.
"Retailers saw better-than-expected back-to-school sales," Cobb says, "which may bode well for the all-important holiday selling season. Retailers will hire extra seasonal workers this year, as they do every year. However, the hiring will not be robust by any measure. It may outpace last year's holiday hiring, but that is not saying much, considering retailers added the fewest seasonal workers in nearly 20 years."
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Reader Comments (Page 1 of 1)
10-01-2009 @ 3:50PM
Highest CD Rates said...
Yeah this is a sigh of relief for many people who were living under this impression that they might loose their jobs anytime. Hopefully the conditions from here will improve as the worst of this economic crisis is passed and economies around the world are again showing good signs
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10-01-2009 @ 5:38PM
Iridium said...
The economy is showing good signs because corporations have cut their way to increased profits. There isn't any real growth.
Right now the economy as a whole is trying to get to the minimum number of workers required to stave off a collapse. There will be no rebuilding of the labor market. Not unless real sales increase by massive amounts. The problem is that total sales can't even become a shadow of the past decade because consumer spending was financed through BS and easy credit.
Corporations and the stock market based earnings and performance on unattainable levels. For some reason investors think that corporations like Apple should be able to show higher revenues than 2006-2007 by next spring. WHAT??? The economic recovery that has been priced in actually exceeds the entire growth period of 2002-2007.
If you still have a job by the end of the year you are probably not in danger of losing yours. However you will be expected to fulfill a workload higher than any time in your life and higher than anywhere else in the world. You might actually pray to be fired.
Another thing for certain is that any new hiring is going to be at a far lower pay rate than the jobs that were lost. Not very good if you are going to try and grow the economy. The same thing happened after the Dotcom collapse. In 1999 graduates in my field were getting $75,000 starting salaries. In 2001 the average starting salary was $27,000. Most people still aren't at the $75,000 level after 7-8 years of experience.