Job Cuts in May Reach Highest Level in More than a Year
Job cuts in May rose to the highest level in more than a year, with the technology sector being hardest hit, according to outplacement firm Challenger, Gray & Christmas.
U.S.-based employers said they intended to cut 52,961 jobs, a 31% increase from April and the largest one-month total since February 2013, when 55,356 job cuts were recorded, according to figures compiled by the outplacement firm.
Hardest hit was the technology sector, Challenger said, noting it had recorded 18,799 announced job cuts in the sector, the highest number since May 2012. Most of those cuts--as many as 16,000--come from Hewlett-Packard Co. (HPQ), which also accounted for the largest share of the cuts in 2012.
"Five-figure job-cut announcements, such as Hewlett-Packard's last month, have been rare since the recession ended in 2009," John A. Challenger, the firm's chief executive, said in a statement, noting, "The last time we saw a figure on this scale was February 2013, when JP Morgan Chase announced a large reduction in the number of bankers in its mortgage unit, most of whom were hired in the wake of the recession to deal with the flood of foreclosures and the refinancing of troubled loans."
On an annual basis, the computer or tech sector has lost the most jobs to date, followed by retail, financial, healthcare/products and transportation.
Geographically, most job cuts were reported in California, followed by New York, Florida, Illinois and Pennsylvania. The geographic location, however, is based on the location of the layoff or corporate headquarters identified in the company's announcement.
Despite the May surge, Mr. Challenger said, the downsizing pace is expected to continue to slow down in the second half of the year "unless there is a sudden and severe shock to the economy."
Mr. Challenger pointed to reports of continued growth in the coming months, strong car sales, factory orders increasing in April for the third consecutive month, and a report that small businesses saw their strongest hiring push in more than a year as promising signs.
"Moreover, the latest report on metropolitan area unemployment from the Bureau of Labor Statistics shows that there are now 118 metro areas with unemployment rates below 5.0%," Mr. Challenger said. "All of this bodes well for the nation's job seekers."