Sunday, July 14, 2024

Job cuts drop 49% in US in June, lowest in 7 months

In some respite in the layoff season, a new report has revealed that job cuts in the US dropped 49 per cent in June, reaching a seven-month low, signalling that the worst may now be over.

According to the report from career services firm Challenger, Gray & Christmas. US-based employers announced 40,709 cuts in June, down 49 per cent from the 80,089 cuts announced in May.

It is up 25 per cent from the 32,517 announced in the same month one year prior, according to a report.

Despite the drop, June’s total marks the sixth time this year when cuts were higher than the corresponding month a year earlier.

“Employers have announced 458,209 cuts so far this year, a 244 per cent increase from the 133,211 cuts announced through June 2022,” the report mentioned.

It is the highest first-half total since 2020, when 1,585,047 cuts were recorded.

With the exception of 2020, it is the highest January to June total since 2009, when 896,675 job cuts were announced.

“The drop in cuts is not unusual for the summer months. In fact, June is historically the slowest month on average for announcements,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas.

It is also possible that the deep job losses predicted due to inflation and interest rates will not come to pass, particularly as the Fed holds rates, he added.

Companies announced 187,793 cuts in the second quarter, up 142 per cent from the 77,715 cuts announced in the second quarter of 2022.

It is down 31 per cent from the 270,416 cuts announced in the previous quarter.

Technology is leading in job cut announcements this year with 141,516 job cuts, up 2,353 per cent from the 5,769 cuts announced in the same period last year.

Retail companies in the US announced the second-most job cuts this year with 48,212, a 718 per cent increase from the 5,896 cuts announced in the sector during the same time last year.

Services firms announced 31,820 cuts in the first half of the year, 163 per cent higher than the 12,081 cuts announced in that sector during the same time in 2022.

“The cuts at Services firms may be reflecting the cost-cutting many companies are undergoing to prepare for an economic slowdown,” said Challenger.

The Media industry shed 18,836 cuts this year. Of those, 2,091 were in digital, broadcast, and print News.

US-employers announced plans to add 115,462 positions so far in 2023, the lowest first-half total since 2016, when 76,751 new hires were recorded, said the report.

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