December 2, 2009
Employers are still cutting jobs, but at a sharply lower pace.
A report by global outplacement consultancy Challenger, Gray & Christmas, Inc., shows companies announced 50,349 planned job cuts in November -- which is the fewest number of monthly reductions since 44,416 were announced in December 2007.
The November total was 9.6 percent lower than the 55,679 job cuts announced in October and marks the fourth consecutive decline in monthly reductions. November job cuts were down significantly from a year ago, falling 72 percent from last November's 181,671 job cuts, which was the highest monthly total of 2008.
Last month's decline continues a dramatic slowdown in the pace of job cutting in the second half of 2009. Since July 1, employers have announced an average of 69,252 job cuts per month. In contrast, the average monthly job-cut total from January through June was 149,446.
It was the heavy downsizing during the first six months of the year that virtually ensured 2009 job cuts would surpass the 2008 total. This inevitability occurred last month, as the year-to-date job-cut total moved to 1,242,936, compared with last year's 12-month total of 1,223,993. The total through November is 17.5 percent higher than the 2008 11-month total of 1,057,645.
Much of the increase in job cutting this year can be attributed to a handful of industries that were particularly vulnerable in this downturn. In fact, more than one in every four job cuts (27 percent) this year came from just two sectors: automotive and government/non-profit. Between the two, 330,510 job cuts have been announced.
Job cuts in both sectors were down last month. The health care sector led all sectors in November with 9,558 reductions, most of which were due to a restructuring by health care products giant Johnson & Johnson that will result in 8,100 job cuts in the coming months.
"Most industries are seeing job cuts subside," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. "Barring any unexpected shocks to the economy, we appear to be coming out of the woods when it comes to downsizing. Unfortunately, the second half of the job-market equation -- hiring -- has not shown any signs of an imminent rebound. At the moment, payrolls continue to experience net losses every month, a trend that is likely to repeat through the end of the year."
This is not to say that there is absolutely no hiring. On the contrary, employers have been hiring about four million new workers per month over the last several months, according to one government report. "In addition, there were about two-to-three million unfilled job openings as of the end of September," he said.
Challenger points out that now is actually a great time to double one's efforts. "Not only is there less competition," he says, "but many decision makers who might travel a lot during the year, catch up on work around the office as business slows. The odds are greater that you will connect with a hiring authority in your specific field. Perhaps the holiday spirit will move that person to meet with you and help you in your job search."
