US Job Cuts Fall To Lowest Since May 1993

US companies Job cuts fell 34.8 percent from a month earlier in November 2021 and 77 percent from a year earlier to 14,875. This was the lowest since May 1993. Companies are battling to keep workers amid a tight labor market.  The technology sector had the most job cuts with 1980.

Job cuts announced by U.S.-based employers

While not a surprise, the severity underscores the impact that has caught Fed officials off guard

Job Cuts Highlights

  • Companies in the technology sector announced the most job cuts (1,980),
  • Services sector cuts (1,835)
  • Health care/products sector cuts (1,817)
  • Real estate sector cuts (1,677)
  • So far this year, employers have announced plans to cut 302,918 jobs from their payrolls, down 86% from the 2,227,725 jobs eliminated through the same period last year.
  • It is the lowest January-November total on record

“With the Omicron variant emerging and the unknowns that come with its spread, coupled with the ongoing difficulty hiring and retaining workers, it’s no surprise job cuts are at record lows. Employers are spread thin, planning best- and worst-case scenarios in terms of COVID, while also contending with staff shortages and high demand,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

Legal challenges to the Federal Occupational Health and Safety Administration (OSHA) Rule

The rule require companies with at least 100 employees to ensure workers are either vaccinated or tested regularly. Government contractors and health workers will not have an option to test. Currently, approximately 59.4% of the population is fully vaccinated and 20.9% have received booster shots, according to the Centers for Disease Control and Prevention (CDC).

Vaccine refusal layoffs across industries

22% of layoffs due to vaccine refusal in October.

Vaccine refusal has accounted for 7,227 job cuts so far this year, 384 of which occurred last month. Of those, the vast majority (6,322) occurred in the Health Care/Products sector. Another 595 occurred in Transportation companies, while 305 occurred in Government entities. Five cuts were reported at organizations in the Education sector. 

Industry sectors with the most dismissals

  • Technology sector most job cuts in November with 1,980, for a total of 12,761 through November, down 84% from the 77,826.
  • Services sector announced the second-highest total in November with 1,835 for a total of 26,996 this year.
  • Aerospace/Defense companies have announced the most cuts this year with 34,543, 60% lower than the 85,814 announced through the same period last year. 
  • Energy companies announced 1,282 in November for a total of 21,537 for the year. This is 56% lower than the 48,656 cuts announced through November 2020.

Reasons for announced job cuts 

  • Company closings caused the most cuts in 2021 with 62,599
  • Restructuring, which was cited for 56,865 cuts so far this year.
  • Market conditions were cited for 50,394. COVID-19 has been cited as the reason for 8,904 cuts this year, compared to 1,105,599 cuts attributed to COVID-19 through November last year.

Seasonal hiring plans

Through November, Challenger has tracked 940,300 seasonal hiring plans from Retailers, Transportation, and Warehousing companies, up 11% from the 849,350 announced during the 2020 holiday season. It is the most since the firm began tracking these direct announcements in 2012.

Source: Challenger, Gray & Christmas

From The TradersCommunity News Desk