45% Fewer Layoffs in July 2012 Than July 2011

Planned layoffs declined for the second consecutive month in July, as employers announced job cuts totaling 36,855, down 2.0 percent from 37,551 in June, according to the latest job cuts report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

Job cuts last month were down 45 percent from a year ago, when employers announced plans to cut 66,414 workers from their payrolls in July. This is just the third time this year employers announced fewer cuts than the same month in 2011.

Overall, employers have announced 319,946 job cuts so far this year. The pace of downsizing is virtually even with a year ago; up just 2.5 percent from the 312,220 planned layoffs announced from January through July.

July job cuts were led by employers in the financial sector, which announced 6,156 planned layoffs during the month. That is largest number of monthly job cuts announced by this industry since January, when financial job cuts totaled 7,611.

Morgan Stanley and Citigroup were among the notable financial institutions cutting workers in July as the fallout from the European economic crisis continues to impact Wall Street. These two banks alone have shed more than 5,500 workers since January 1.

“The situation in Europe is far from being resolved and ongoing weakness here could continue to take a toll on the financial sector. Making matters worse, is evidence that some big banks did not learn anything from the 2008 collapse and continue to make bad bets resulting in massive losses,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

Overall, the financial sector has announced 26,352 job cuts this year, up 79 percent from 2011. It ranks fifth in job cuts among all industries. The leading job-cut sector through July is the computer industry, which has announced 35,006 cuts to date. That is up 214 percent from a year ago, but the vast majority of the cuts were the result of a single announcement: Hewlett-Packard’s planned workforce reduction of 27,000 reported in May.

The second ranked transportation industry announced another 3,350 job cuts in July, bringing its year-to-date total to 29,965, a 323 percent increase from the 7,079 job cuts announced by these employers in the first seven months of 2011. Meanwhile, retailers announced 4,135 job cuts; enough to move it up one spot to be the third largest job cutter, with 27,925 cuts to date.

“While the decline in job cuts over the last two months is good news, it is not unusual to see these types of slowdowns during the summer months, when business activity of all types seems to lag as key decision makers tend to be out of the office more frequently. Employers may be in a pre-election holding pattern. Historically, the fourth quarter tends to be the heaviest job-cutting periods of the year. So, this may simply be the lull before the storm,” said Challenger.