September 5, 2024
(press release)
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U.S.-based employers announced 75,891 cuts in August, a 193% increase from the 25,885 cuts announced one month prior. It is up 1% from the 75,151 cuts announced in the same month in 2023, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc. For the year, companies have announced 536,421 job cuts, down 3.7% from 557,057 announced through August of last year. Excluding the 115,762 job cuts announced in August of 2020, last month was the highest August total since 2009, when 76,456 layoffs were recorded. Source: Challenger, Gray & Christmas, Inc. “August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics. Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc. “Cuts are following a very similar trend from last year as ongoing pressures have challenged labor decisions,” he added. Which Industries Are Cutting Workers? Source: Challenger, Gray & Christmas, Inc. “The Tech sector is moving from a growth and innovation focus into one of profitability and efficiency. AI and automation adoption is also driving job cuts at Tech companies across roles and functions. This talent, however, is still in high demand. Many of these professionals will land elsewhere, in and outside of the Tech industry. That said, we’re entering a period of slower hiring, so it may take longer than it has at any point in the last decade,” said Challenger. Indeed, yesterday’s Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics (BLS) showed job openings remained flat in July, while discharges rose by about 336,000 positions. Meanwhile, according to Challenger tracking, announced hiring plans have fallen to the lowest year-to-date total since Challenger began tracking hiring plans in 2005. “The labor market overall is softening,” he added. Education Entertainment/Leisure “Hotels and travel companies are still grappling with the post-pandemic demand and competition from other accommodation providers. Meanwhile, workers are demanding higher wages and more hours,” said Challenger. Industrial Manufacturing “Manufacturing cuts are likely due to multiple factors including AI and automation. These companies also potentially over-hired during the pandemic and are correcting now,” said Challenger. Retail Source: Challenger, Gray & Christmas, Inc. Media & News News, which includes digital, broadcast, and print, and is tracked as a subset of Media, announced 533 layoffs in August, the highest monthly total since 1,226 cuts were recorded in February. For the year, News has announced 3,102, up 31% from the 2,360 cuts tracked during the same period last year. Why Are Companies Cutting? For the first time since April, employers specified Artificial Intelligence (AI) as a reason for job cuts. Last month, 5,943 cuts were due to AI, all of which occurred in the Technology space. So far this year, 7,126 cuts are due to AI. Record Low Hiring Plans # # # Contact Colleen Madden Blumenfeld for more data or to set up an interview with SVP Andy Challenger.
Technology
Last month, Technology announced the most job cuts in 20 months when 41,829 cuts were recorded for January 2023. The sector announced 39,563 job cuts in August, for a year-to-date total of 105,426. That is down 29% from the 149,452 announced through the same period last year.
Organizations in the Education sector, including schools and universities as well as vendor education providers, have announced 25,396 job cuts in 2024. This is up 222% higher than the 7,878 cuts announced through August 2023.
Entertainment/Leisure companies have cut 21,686 in 2024, up 85% from the 11,699 cuts announced in the sector through August 2023.
Companies in the Industrial Manufacturing space have announced 17,828 cuts through August, an increase of 261% from the 4,943 cuts announced in the sector during the same period last year.
Retailers are announcing store closures and bankruptcies, including Macy’s and LL Flooring, but have cut 56% fewer jobs than during the same period in 2023. So far this year, Retail has announced 24,489 job cuts, compared to 55,755 cuts in January through August last year.
The Media industry, which includes television, film, streaming, and News, announced 12,122 job cuts so far this year, down 37% from the 19,117 announced in the industry through August 2023.
Last month, 37,403 job cuts were attributed to “Cost-Cutting,” while 16,439 were due to “Market/Economic Conditions.”
U.S. employers have announced 79,697 hiring plans, down 41% from the 135,980 plans recorded through August last year. The year-to-date total is the lowest since Challenger began tracking in 2005. The previous lowest total through August occurred in 2008, when 80,387 hiring plans were announced.
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