Layoffs Down 19% From 2011 and Lowest Since 1997

Downsizing activity remained relatively flat in September as US-based employers announced plans to cut 33,816 jobs from their payrolls during the month.  That was up 4.9 percent from a 20-month low of 32,239 job cuts in August, according to the latest report released Thursday by global outplacement firm Challenger, Gray & Christmas, Inc.

Last month’s total was 71 percent lower than a year ago, when planned job cuts unexpectedly surged to a 29-month high of 115,730.   It was, in fact, the lowest September total since 1997 when only 20,698 were announced.

September brings to an end one of the slowest job-cut quarters in over a decade.  Employers announced 102,910 job cuts in the third quarter, down 27 percent from the previous quarter (139,997), and 56 percent lower than the third quarter of 2011 (233,258).  It was the lowest quarterly total since the second quarter of 2000, when planned layoffs numbered 81,568.

Employers have now announced 386,001 planned job cuts in 2012, which is 19 percent fewer than the 479,064 job cuts recorded by this point last year.  One has to go back to 1997 to find fewer job cuts announced through the first nine months of the year.  That year, employers announced 281,496 job cuts through September.

Contributing to the decline in monthly job cut figures is the significant drop-off in the number of layoffs announced by the government sector.  These employers announced just 14,186 job cuts through September, compared to 119,027 by this point in 2011. 

The biggest job-cutting industry last month was energy, which announced 3,393 job cuts in September.  To put that figure in perspective, the top job-cutting sector a year ago (government) announced 54,182 layoffs.

“Layoffs are definitely at pre-recession levels.  Unfortunately, hiring has not returned to those levels.  A combination of factors, including the upcoming election, ongoing instability in Europe, growing signs of weakness in Asia and a host of other issues, are keeping companies from making any major expansion or hiring moves” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

In the latest Business Roundtable survey of CEOs from the nation’s largest corporations only 30 percent expected to increase capital spending over the next six months.  That was down from 48 percent in the first quarter.  Meanwhile, just 29 percent anticipated adding more workers, down from 42 percent in the first quarter.

While corporate America remains slow to hire, retailers are beginning to bring on extra help for the holidays.  Hiring announcements last month, reaching 425,683 planned hires, of which 413,700 will be temporary seasonal jobs in the retail and food industries.