CHICAGO – “The new year came in like a lion, as record downsizing in the retail sector helped push the number of planned job cuts announced in January to 241,749,” or 222 percent more than the year-ago 74,986 positions, according to outplacement experts Challenger, Gray & Christmas Inc.
The survey’s nine-state East region had 76,231 layoff announcements last month, including 2,200 in Rhode Island and 13,611 in Massachusetts.
January has historically been the year’s heaviest downsizing month. The year’s first month was the nation’s worst for layoff announcements in seven of the 16 years from 1993 to 2008. January’s job-cut announcement average for that period, of 98,053, was the highest of any month and 10 percent higher than No. 2 October’s average of 88,892.
But last month’s flood of layoff announcements was the second-heaviest of any January on record and the fourth highest monthly total since Challenger began tracking layoff data in 1993. The worst months in the Challenger database were January 2002 with 248,475 cuts, September 2001 with 248,332 and October 2001 with 242,192.
“The January surge was due in large part to significant layoffs in the retail sector, which is coming off its worst holiday sales season in decades,” the outplacement consultancy noted.
“Retailers announced 53,968 job cuts in January, a record number for the industry and one of the largest one-month job-cut totals for any industry.” By comparison, the retail industry announced 81,621 layoffs in all of 2008 and 51,036 in 2007.
The top monthly single-industry cuts in the Challenger database were September 2001’s 96,333 transportation layoff announcements, November 2008’s 91,356 financial-services cuts, last month’s retail cuts, December 2005’s 50,264 government or nonprofit job losses and July 2001’s 44,908 cuts in the telecommunications sector.
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Among other sectors last month, the sharpest losses were in industrial goods, which announced 32,083 job cuts; the computer industry, 22,330; pharmaceuticals, 22.063; and the aerospace and defense industry, 17,800.
“The variety of industries represented among the top five job-cutting sectors in January is further evidence of how far the impact of this recession has spread,” said John A. Challenger, the consultancy’s chief executive officer. “Industries that at first appeared to be immune to downturns, such as computer and pharmaceutical, are now rapidly shedding workers. Unfortunately, there is no light at the end of the tunnel yet. Even if the [federal] stimulus package is successful, it could take months to make a noticeable impact on the employment picture.
“If there is any bright spot in the latest job-cut data,” he added, “it is the fact that financial firms announced only 1,458 job cuts in January. That is the lowest one-month total for that industry since 2005.”
Financial firms last month announced plans to hire 1,000 workers, bringing the sector’s net loss for the month to about 458.
Total hiring announcements last month nationwide amounted to 23,973 positions, only 450 of them in retail. The top five sectors, the Challenger survey found, were the government / nonprofit sector, announcing plans to hire 12,123 workers; the computer industry, 4,500; entertainment and leisure, 3,500; financial; and insurance, 870.
Challenger, Gray & Christmas Inc., a Chicago-based outplacement consulting firm, is the producer of a monthly job-cuts report based on corporate layoff announcements nationwide. To learn more, visit www.ChallengerGray.com.
