Job Cuts in 2010 Tumble to Lowest Level in More Than a Decade

Posted Jan 5th 2011 9:00AM by David Schepp
Filed under: Employees, Economic Data

The dismal jobs front got a bit more good news, following the release of a report showing the nation's employers last year cut the fewest number of workers in more than a decade. Further, the findings showed 2010 ended on a high note, with December recording the lowest number of monthly cuts since 2000.

The slowdown in cuts follows an uptick in activity in 2009 when downsizing reached a seven-year high, according to the 2010 year-end job-cut report, released Wednesday by job-services firm Challenger, Gray & Christmas. Last year, employers announced plans to eliminate 529,973 positions, the lowest number since 1997.

For the month, planned layoffs reached 32,004 in December, down 34% from 48,711 in November, Challenger said. Compared to the same month a year ago, December job cuts fell 29% from 45,094. December surpassed August (34,768) as the lowest job-cut month of the year, the report noted. The layoffs were the lowest monthly number since June 2000 when employers cut 17,241 jobs.

"The downsizing phase of the recession really came to an end in 2009," said Challenger CEO John Challenger, adding that job cuts fell dramatically in the second half of 2009 and continued to slow last year to levels not seen since before the 2001 recession.

Adding to the optimism, the report showed that the ebb in layoffs occurred across the employment spectrum. Nearly every business sector saw job cuts decline in 2010, including the automobile industry, where layoffs tumbled by 91%.

Among those sectors showing significant drops in layoff activity were industrial goods manufacturers, where jobs cuts dropped 79% to 26,487 from 125,423. Retail employers, which had 98,807 job cuts a year ago, announced 38,751 layoffs in 2010, a 61% drop, Challenger said.

Even the hard-hit government and non-profit sector experienced a 17% drop in layoffs, but still recorded a loss of 142,255 jobs. Only the pharmaceutical industry, with 53,636 layoffs, recorded more job cuts, the report showed.

The elimination of public sector jobs is a trend that is likely to carry into the new year as local and state governments struggle to balance budgets. Worse, public-sector layoffs could rise in 2011 should the federal government plan job cuts to reduce expenditures.

Looking ahead, CEO Challenger expects gains to be slow in the new year. "Unemployment will probably remain high throughout 2011," he said. Further, the nation's jobless rate may once again top 10%, a level not seen since October 2009, as discouraged workers rejoin their job searches and those with jobs begin looking for better ones.