Planned Job Cuts Plummet in March
By Jennifer Lawinski
Companies plan to give fewer workers the axe, as proposed job cuts fell in March to their lowest level in 10 months, according to the latest job-cut report from global outplacement firm Challenger, Gray & Christmas.
U.S.-based employers announced that 37,880 positions would be terminated during the month of March, 27 percent fewer than the 51,728 job cuts announced in February. The number of cuts is the lowest since May 2011, when 37,135 job cuts were announced.
For the quarter, however, job cuts are up over 2011. Through the first quarter of 2012, companies announced the termination of 143,094 employees, up 9.4 percent over the first quarter of last year, when cuts came in at 130,749 jobs.
The highest number of planned cuts was in telecommunications, where 4,089 jobs were eliminated, nearly half of which came from wireless carrier T-Mobile, which is consolidating call centers to save money. In addition, Verizon Wireless announced in March that it would be cutting 750 call center workers, and Wells Fargo and QVC also also cut call center jobs.
The consumer products sector has seen the most job cuts in Q1 2012, with 18,438 layoffs, a significant jump from the 4,571 cuts in the first three months of 2011. Transportation also saw a steep rise in the quarter, up more than 500 percent over 2011, rising from 2,547 to 17,051.
"Both consumer products and transportation saw fewer job cuts in March after experiencing heavy cuts in February,” said John Challenger, CEO of Challenger, Gray & Christmas, in a statement. “These are key indicators of the economy's health, so they will be closely monitored in the coming months for more signs of distress. The hope is that the February surge in these sectors was not indicative of a trend.”
In the public sector, job cuts have fallen sharply year-over-year. In 2012, 5,750 government job cuts were announced, down 86 percent from 2011's first-quarter number of 41,929. Whether this is a sign of public sector stabilization or a temporary respite for government workers is unclear, according to Challenger.
"This may simply be the eye of the storm for government workers; a lull in activity in an election year and a time when many state budgets are still being negotiated," Challenger said. “The potential for a surge in government cuts is significant. Massive cuts in the U.S. Post Office are still being considered.
“Last month, the U.S. Department of the Interior was asked to develop a plan that would eliminate 5,000 workers by the end of fiscal year 2013. In Illinois, the governor has proposed a budget that would result in 2,700 job cuts. So, we definitely have not seen the end of large-scale government layoffs.”
Budget shortfalls are still hitting local governments hard, he said, evidenced by a 192 percent rise in education job cuts from February's total of 1,275 to March's 3,733. "These cuts are a strong indicator that more government cuts are on the horizon," Challenger said.