Job-cut announcements in 2017 see lowest level since 1990, Challenger report says
January 4, 2018
U.S. employers announced plans to cut 32,423 jobs in December, bringing the year’s total to a low not seen since 1990, global outplacement consultancy Challenger, Gray & Christmas reported Thursday.
“The tight labor market, coupled with uncertainty surrounding health care and tax legislation, possibly kept employers from making any long-term staffing decisions this year,” CEO John Challenger said in a statement. “However, 2018 may see an increase in job cut announcements, as companies realign with consumer demand.”
Cuts in 2017 totaled 418,770, 20 percent below 2016’s number. In 1990, companies announced plans to cut 316,047 jobs.
Last month saw 7.4 percent fewer job-cut announcements than November, and 3.6 percent fewer than in December 2016.
Widespread restructuring and competition from online sales led to unprecedented cuts in retail jobs in 2017. Retail employers announced 76,084 job cuts this year, a 28 percent increase from 2016, according to the Challenger report.
“The retail pivot that caused thousands of store closures and job cuts was not seen in any other industry this year,” John Challenger said.
The health-care and services sectors also had significantly higher job-cut announcements in 2017. Health-care employers announced 40,732 cuts, a 118 percent increase over 2016, while announced plans to cut jobs in services almost quadrupled to 36,174.
“While companies in the Pharmaceutical, Health Care, Construction, and Food industries did announce more job cuts than last year, it was nothing like the Energy cuts seen in the last two years or the Financial cuts seen during the recession,” Challenger said.
Despite the losses, the passage of the tax bill has prompted unprecedented hiring plans for 2018. Employers report plans to hire more than 1.1 million near hires, 27 percent more than last year.
AT&T, Fifth Third Bancorp, Wells Fargo and Boeing were among the companies that announced bonuses, wage increases or new investment in response to the passage of the tax bill.
The Challenger report comes a day before the Labor Department releases its December jobs data.