U.S. employers continue to downsize, though workforces got a bit of a reprieve in August from the month before, according to a report released Thursday by Chicago outplacement consultancy firm Challenger, Gray & Christmas.
Employers in the U.S. announced plans to shed 41,186 workers from payrolls last month, a 61% decline from the 105,696 layoffs in July, the report said. The July figure was the highest since September 2011, when monthly job cuts reached 115,730.
However, the August total was 2.9% higher than the same month a year ago, when 40,010 planned job cuts were announced. This marks the seventh month this year that the job-cut total was higher than the comparable month of 2014.
Overall, job cuts so far in 2015 are 31% higher than in the first eight months of 2014, with employers announcing 434,554 job cuts to date this year. With monthly totals averaging 54,319, 2015 job cuts are on track to exceed 650,000 for the year, which would be the highest year-end tally since 2009’s total of 1,272,030.
The retail sector saw the heaviest job cutting in August, with 9,601 planned layoffs reported during the month. Most of those were related to the bankruptcy of East coast supermarket chain A&P, which is closing more than 100 stores and laying off a reported 8,500 workers by Thanksgiving. The retail sector has announced 57,363 job cuts so far this year, which is 90% over the 30,109 job cuts announced by this point in 2014.
“Overall, retail is relatively healthy, but we have seen some big layoffs this year, particularly from long-time players that simply have not been able to keep up with changing consumer trends,” the firm’s chief executive John A. Challenger said in a press release. “Going forward, the recent volatility in the stock market may have a negative impact on retail sales, as investors who took a hit curtail spending. However, retailers may be reluctant to shed too many workers as we head into the holiday season.”
The industrial goods sector saw the second heaviest downsizing activity in August, announcing 7,949 layoffs during the month. That is the largest number of job cuts for this sector since March, when 9,163 job cuts were announced.
About 22% of the industrial goods cuts were related to the recent drop in oil prices. In all, 3,808 job cuts were attributed to oil prices last month, which is down 57% from 8,878 oil-related job cuts in July. Since the beginning of the year, oil prices have been blamed for 82,268 layoffs, mostly in the energy sector, but also among industrial goods manufacturers that supply equipment and materials for oil exploration and extraction.
“As we head into the final months of 2015, there are definitely some red flags that suggest we may see more layoffs from the energy sector, as well as in other areas of the economy,” Challenger said. “The problems that China is facing could send shock waves throughout the global economy, including the United States.”
The last quarter of the year is also when companies tend to make workforce and operational adjustments in order to meet year-end earnings goals, he added.