Pace of layoffs slows slightly in Nov.
December 17, 2001,
With the U.S. economy officially limping its way through a recession, and companies responding by slashing their payrolls, job layoffs totaled 181,412 during November, the sixth straight month that job cuts exceeded 150,000.
Seeing the glass half full, rather than half empty, the November total was 25 percent lower than the 242,192 job cuts announced in October, reported Challenger, Gray & Christmas, the international outplacement company that tracks job cut announcements nationwide.
But reflecting a widespread economic malaise, most notably in the telecommunications sector, job cuts in November were running more than four times ahead of the year-ago pace of 44,152 layoffs recorded during November 2000.
And measuring the impact of the terrorist attacks, a total of 624,411 job cuts have been announced since Sept. 11, said Challenger. Putting it into perspective, more jobs were lost in that 80-day period than during all of 1993, 1994, 1995, 1996 or 1997. And that 80-day total is only 11,000 fewer than for all of last year. So far this year, each month has exceeded the same month in 2000 by an average of 119,548 job cuts.
Hardest hit so far this year is the telecommunications sector, which increased its year-to-date layoff total by 9.4 percent in November to 292,756. Remarkably, Challenger noted, job cuts in telecommunications are almost 12 times greater than during the same 11-month period a year ago, when layoffs totaled 24,518. November marked the sixth time this year that telecommunications has led all other industries in planned downsizing.
"The very heavy downsizing reported in November is more confirmation that the effects of the Sept. 11 attack on the economy have been substantial," said John Challenger, ceo of Challenger, Gray & Christmas.
"In the eight years we have tracked job-cut data, the downsizing for the last three months has been at levels never before seen. We hoped that the economic effects from the shock would have subsided in September, but October and now November have quashed those hopes."
While a disproportionate share of job cuts have been concentrated in high-tech and transportation, retailing is now being squeezed, said Challenger. "We are beginning to see signs that another big sector of the economy is feeling the pinch of the recession. Retailers, seeing significant holiday results, are offering very big discounts early, keeping early sales just above last year, but at a heavy price: swiftly falling earnings, which will lead to heavy retail downsizing into 2002."
As the economy continues to slow, employers grow more cautious, suggesting that even when the economy does start to improve, job growth will lag far behind, said Challenger. "Right now, no one is bold enough to anticipate a sudden turnaround for this economy, so even when business starts to improve, most companies will proceed with great care.
"Many employers are loath to expand their work forces only to have some economic anomaly force them to announce more job cuts."