U.S. layoff announcements fall, hiring rises

CHICAGO – Employers nationwide announced plans to trim 53,579 jobs in March, a 25.68-percent decline from February’s 72,091 job-cut announcements, outplacement consultancy Challenger, Gray & Christmas Inc. reported today.
Compared with a year ago, the number of job-cut announcements rose 9.35 percent last month, “continuing a trend that has seen the pace of job cutting remain virtually unchanged from a year ago,” the Challenger report said. The first quarter’s job cuts totaled 200,656, “just 2.4 percent higher than the 195,986 cuts in the same period in 2007,” it said.
The government and nonprofit sector led in job cuts for the second month in a row, announcing 16,157 layoffs. No. 2 was the transportation sector, with 5,089 announcements. “Suffering from a precipitous drop in tax revenue,” the transportation sector “has announced 28,363 job cuts since Jan. 1,” the report said. The financial sector was No. 3, with 4,663 job-cut announcements in March and a year to date total of 26,719 announcements.
“We are also seeing increased cuts in retail, so this is not a painless downturn by any means,” John A. Challenger, the firm’s CEO, said in a statement today. “Thus far, however, we simply are not experiencing the same level of job cutting that we did after the 2001 recession and the dot.com bust.
“The fact is, we may not see the same level of job cutting, even if the economy continues to worsen,” Challenger added.
“There could be several explanations …. For one, job creation never reached the levels we saw prior to the 2001 recession. … Employers simply may not have as much fat to trim. Another reason we have not seen a surge in cuts is that it remains unclear as to how widespread this downturn will be. It is clearly affecting housing, construction, financial services, manufacturing and retail but other sectors – including energy, international, health care and technology – remain relatively unscathed.”
The aging work force also “could limit the number of official job-cut announcements,” he said. “Companies may be able to reach their optimum staffing levels through attrition and retirements. In fact, the probability of increased retirements among the huge population of baby boomers may make employers unwilling to cut any deeper, knowing that an oversupply of labor could quickly turn to a shortage when the economy inevitably improves.
“Unfortunately, none of these trends help those who are currently looking for employment. Companies may indeed be reluctant to enact mass layoffs, but they are even more reluctant to add workers,” Challenger said.
“Workers seem to be getting the message. Part of the reason the unemployment rate actually fell in February was due to job seekers giving up and abandoning the labor force entirely. This situation is unlikely to improve for many months.”
In fact, he said, “As employers continue to put a freeze on hiring … we will probably see more months in which payrolls remain relatively static or worsen.”
Other reports also have hinted at weakness in the labor market,
Bloomberg News said, citing last week’s U.S. Labor Department report that the number of people receiving unemployment benefits reached a two-and-a-half-year high in the week ended March 15. Another government report due Friday is expected to show the nation lost jobs in March for the third month in a row, economists said in a recent Bloomberg survey.
But a separate report today from ADP Employer Services found that private employers added 8,000 jobs last month, erasing nearly half of February’s revised loss of 18,000 positions. Analysts had expected a decline of 45,000 jobs, based on the median estimate from a Bloomberg News survey of 24 economists, none of whom predicted jobs would rise.
The monthly report, based on data from 392,000 businesses with about 24 million employees, is produced by ADP and St. Louis-based Macroeconomic Advisers LLC. It found service-providing employers added 85,000 workers in March while goods-producing companies shed 77,000. Construction payrolls shrank by 22,000 positions, bringing the sector’s total losses since August 2006 to about 259,000 jobs.
Companies with fewer than 50 workers increased their payrolls by 55,000, ADP found. Mid-sized companies with 50 to 499 workers added 5,000 jobs, while larger companies pared their payrolls by 52,000.

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.
ADP Employment Services – a division of Automatic Data Processing Inc. (NYSE: ADP) – handles payroll for 1 in 6 private-sector employees nationwide. For more information, including the monthly ADP National Employment Report, visit www.adp.com.

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