Job Cuts Fall in October

The number of planned job cuts announced by U.S. employers declined for the third consecutive month in October, falling 16 percent to 55,679 from 66,404 in September, according to the latest job-cut report by outplacement consultancy Challenger, Gray & Christmas Inc.
The October job-cut total was the lowest since March 2008, when employers announced plans to shed 53,579 workers. It was 51 percent lower than the 112,884 job-cut announcements made in October 2008.
The pace of downsizing has slowed steadily throughout the year after reaching a seven-year peak of 241,749 in January. The month-over-month job-cut total has declined in eight of last 10 months. Four consecutive monthly job-cut totals, including October, were lower than the year-ago figure.
Despite the downward trend, the 1,192,587 layoffs announced this year are 36 percent higher than the 875,974 cuts recorded through October 2008. Only 31,406 more cuts must be announced to exceed the 1,223,993 planned layoffs recorded in 2008.
One area that could see more downsizing before year’s end is the auto sector, which announced plans to shed another 13,420 workers last month. This brings its 10-month job-cut tally to 164,440, the highest among all industries.
The second-ranked government and non-profit sector has announced plans to reduce payrolls by 160,434 workers this year. While job cuts in this sector have declined in each of the last two months, it is an area that is primed for more cuts, as states and local governments continue to buckle under the weight of oppressive budget deficits.
“While there are still some trouble spots, the continued decline in job cutting activity across most industries is a positive sign that the economy is slowly improving. Taken with the recently reported rise in GDP, increase in manufacturing activity and unexpected gain in home sales, it appears that the light at the end of the tunnel is finally visible. However, it is important to realize that, as deep and widespread as this recession was, it is going to be a long and sometimes painful recovery,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
“It will be particularly painful for the 14.5 million unemployed Americans, who will find that job gains will not come nearly as quickly as the job losses occurred. Companies will, at first, be very cautious not to over-hire, in case this recovery is not sustainable. Even when the pace of job creation accelerates, it simply will take a lot of time to re-absorb all of these displaced workers,” Challenger said.  

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