More Good Economic News: April Job Cuts 3rd Lowest Over Last 16 Months

The slow pace of downsizing continued in April, as employers announced plans to cut 36,490 jobs from their payrolls during the month, 12 percent fewer than the 41,528 job cuts announced the previous month, according to the latest report on planned layoffs released Wednesday by global outplacement firm Challenger, Gray & Christmas, Inc.

The April job-cut total was down 5.0 percent from the same month a year ago, when 38,326 planned layoffs were announced.  It was the lowest monthly total of the year and the third lowest over the last 16 months.  Year-to-date, employers announced 167,239 job cuts, 24 percent fewer than the 219,509 layoffs by the same point last year. 

Not only have layoffs declined, but hiring is on the rise.  So far this year, employers announced plans to add 172,590 new workers, an increase of 149 percent over same period in 2010 (69,329).  April hiring was dominated by the McDonald’s restaurant chain, which announced a bold plan to add 50,000 employees in one day.

“The slow pace of downsizing suggests employers remain optimistic about business conditions going forward, despite higher energy costs, government deficits and slipping confidence among consumers.  The optimism is evident not only in the lower job-cut figures, but also in announced hiring plans, which have outpaced layoffs through April,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“It is important to realize that our hiring figures represent just a fraction of the job creation that is actually occurring, since most employers do not publicly announce hiring intentions.  Of course, the weak link in the job market right now is the government sector, which continues to shed employees at a heavy rate,” Challenger noted.

The government sector announced 10,731 job cuts last month, bringing the four-month total to 52,660.  The next largest job-cut total comes from the retail sector, which has announced 18,668 layoffs so far this year, including 2,900 in April.

“The good news is that government job cuts are down 32 percent from a year ago.  However, there is little cause for optimism, considering that conditions are not improving the struggling sector.  Most of cuts tracked this year were concentrated in the state and local agencies.  We have yet to see the impact of massive cost cutting at the federal level, but a surge in federal job cuts is inevitable,” noted Challenger.

According to the latest government report on the nation’s gross domestic product, federal spending was down 7.9 percent, the largest decline in more than a decade.  Federal cutbacks are likely behind increased job cuts in the aerospace and defense sector, where layoffs surged more than 200 percent from 3,838 in the first four months of 2010 to 11,792 this year.