On Thursday, October 6, Challenger, Gray & Christmas, Inc., a global outplacement consultancy firm, reported jobs cut in the month of September soared 38% month-over-month in the U.S. economy.
Employers in the U.S. announced 44,324 jobs cuts. In August, 32,188 jobs cuts were announced. (Source: “2016 September Job Cut Report: Cuts Jump 38% to 44,324,” Challenger, Gray & Christmas, Inc., October 6, 2016.)
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Year-to-date, between January and September, employers have announced 435,612 job cuts. In the same period a year ago, there were 493,431 job cuts announced by employers in the U.S. economy. This represents a decline of 11.71% year-over-year.
The energy industry of the U.S. economy remains one of the leaders when it comes to job cuts, with 98,733 cuts having been announced by energy companies year-to-date. In the same period a year ago, this was 72,708. In other words, jobs cuts in the energy sector increased by 35.79%.
One of the biggest reasons stated by employers for jobs cuts in September was restructuring; 18,229 jobs were cut due to this factor alone. Year-to-date, 153,851 jobs have been cut due to restructuring, making up 35.31% of all job cuts in the U.S. economy year-to-date.
“It is not unusual to see a decreased job-cut activity in the third quarter, as many employers postpone major workforce decisions during the summer months,” said John Challenger, chief executive officer at Challenger, Gray & Christmas, Inc. “We could see a resurgence in cuts to close out the year. The fourth quarter is typically when companies make strategic moves to prepare for the coming year.”
“This year could be particularly volatile in the fourth quarter, with employers holding off on significant moves until they see election results,” he added. “It’s not simply who wins the White House, but there are Senate races and countless ballot initiatives on issues like minimum wages that will influence business strategies going forward.”
Investors and economists use the job cuts data to examine the health of the U.S. labor market. Higher jobs cuts could be an indicator of problems ahead for the jobs market. Lower job cuts mean labor conditions could be improving. This data is usually released three days after the month ends. The next release date is November 3, 2016.
