Tech sector ramps up job cuts: Report
Technology companies saw dramatic increases in cuts last month
U.S. company payrolls rose by 291,000 in January, according to the latest ADP report. FOX Business’ Lauren Simonetti with more.
American businesses cut twice as many jobs in January as they did in December, with the technology industry leading the cuts.
U.S.-based employers cut 67,735 jobs in January, a 106 percent increase from 32,843 jobs cut in December, according to the latest job cuts report from outplacement service firm Challenger, Gray & Christmas.
Technology companies saw the most dramatic job cuts, up 1,829 percent compared to December and up 2,073 percent compared to last January with 13,869 cuts, according to the report. Overall, tech companies cut more than 64,000 jobs last year.
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Andrew Challenger, vice president of Challenger, Gray & Christmas, said in a press release that tech companies have “shed workers as they pivot to new products or services.”
“In some cases, long-standing, bellwether companies are reducing bureaucracy and removing layers of management to become nimbler,” he said.
Tech isn’t the only industry where employers are looking to restructure, according to Challenger.
“Companies across all industries are reexamining their hierarchies, particularly in automotive and retail, where innovations in technology are changing the landscape,” he said.
Retail had the second-highest number of cuts, 10,444, according to the report. Most were the result of store closings, and many more were caused by bankruptcies. Overall, there were more than 48,000 retail jobs cut in 2019 due to bankruptcy. That was the largest number in a single year going back through at least 2001, even more than years of the Great Recession.
A dismantled sign sits leaning outside a Sears department store one day after it closed as part of multiple store closures by Sears Holdings Corp. in the United States in Nanuet, New York, on Jan. 7, 2019. (REUTERS/Mike Segar)
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Industrial goods manufacturers also cut more workers in January, a total of 6,098, according to the report. Last year, there were more than 70,000 cuts in the industry.
“Industrial manufacturing continues to be in a recession,” Challenger said. “The industry has been hit hard by slowing orders, lower corporate investments and trade concerns over the last 12 months.”
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In this March 6, 2019, file photo, a "Save Me" sign rests against the Lordstown Complex sign in Lordstown, Ohio. (AP Photo/Tony Dejak, File)
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The automotive industry also saw more cuts in January, 5,437 altogether. Employers in the industry cut more than 50,000 jobs during 2019.
Of course, not every industry is seeing increases in job cuts. The financial industry saw job cuts fall nearly in half compared to January 2019, according to the report. And there were only about a third as many mining jobs cut in January as there were a month earlier.