August marked the fourth consecutive month when companies announced fewer than 100,000 layoffs for U.S. workers, a trend not seen since 2000 and one that might point favorably to economic growth and an uptick in employment, according to a monthly report from international outplacement firm Challenger, Gray & Christmas, Inc.
From May to August of 2003, employers announced 293,380 job cuts: 68,623 in May; 59,715 in June; 85,117 in July; and 79,925 in August. August job cuts were 32 percent lower than the 118,067 job cuts announced in the same month a year ago.
Rick Cobb, executive vice president with Chicago-based Challenger, Gray & Christmas, called the figures a leading indicator of things to come.
”The direction of the lay off data tends to be a leader in terms of what the economy does,” he says.
However, he cautioned that the fourth quarter of every year traditionally sees employers cutting more workers.
”The good news is that ’03 is a better year than ’02 and ’01, says Cobb. ”The bad news is that the next four months are typically the highest in terms of announced layoffs.”
Since it began tracking job-cut data in 1993, Challenger has seen the final four months of the year historically average 36 percent more job cuts than the third quarter.
Despite the generally positive trend of the last four months, the Challenger report also noted some industries laid off significantly more workers than others. The telecommunications industry, for instance, led the nation in announced job cuts with a planned workforce reduction of 18,739 in August. It was the highest number of telecom cuts since 33,801 job cuts were announced in November, 2002.
In contrast, job cuts in retail and industrial goods sectors were down 23 percent and 30 percent over August of last year.
”While job cuts have fallen and there have been some positive signs of an uptick in manufacturing, there has yet to be any significant indication of a rebound in capital spending that would support the view that employers will begin hiring en masse,” says Cobb.
Corporations with corporate headquarters in California led the nation in terms of work force reductions for the year with 102,031 job cuts, followed by Illinois with 77,308, New York with 65,352, Michigan with 57,581, and Texas with 57,136. The Eastern United States as a whole in August saw 29,826 layoffs; the Midwest 22,807; West/Soutwest 14,910; and the South 12,382.