Record Highs for Job Cuts at the Start of the Year Since 2009
Job cuts experienced a significant spike at the start of the year, reaching levels not seen since the global financial meltdown. Meanwhile, hiring plans plummeted to their lowest in the same period, representing the weakest start to a year since 2009.
US employers revealed plans to lay off more than 108,000 workers within the first month of the year, a massive 118% increase compared to the same month in the previous year, and a 205% increase from the last month of the previous year. This figure is the highest for any January since 2009, when the economy was grappling with the most severe downturn since the Great Depression.
Lowest New Hires in January Since 2009
At the same time, new hires announced by companies dwindled to just above 5,300, representing the lowest number for any January since 2009. This was the year when tracking of data on job hires and layoffs began.
The recession crisis officially ended in March of 2009. However, the recent increase in layoffs suggests that the labor market stability might be on shaky ground.
"Typically, we see a surge in job cuts in the first quarter, but this is a high total for January," stated a workplace expert and chief revenue officer. "It implies that most of these plans were established at the tail end of the previous year, signaling that employers have a less than positive outlook for the year ahead."
Jobless Claims Reach Seasonal High
Despite increased layoff plans, official government data has not shown a significant rise. However, initial jobless claims for the week ending on the last day of the first month totaled a seasonally adjusted 231,000. This figure is the highest since the early part of December. A severe winter storm that impacted large parts of the country likely played a role in the increase.
Yet, the longer-term trend remained at its lowest since October of the previous year. Despite this, high-profile layoff announcements have sparked concerns about potential wider impact on the labor market.
Major Job Cuts Announced by Several Companies
Several well-known companies have recently announced significant job cuts. For instance, a major transportation company revealed plans to lay off over 30,000 workers, contributing to the sector experiencing the most layoffs in January. Also, a tech giant plans to eliminate 16,000 jobs, primarily at the corporate level, placing the tech sector as the second highest in layoffs.
Hiring plans, on the other hand, fell by 13% from January of the previous year and were down 49% from December.
Significant Layoffs Indicated by Labor Department Filings
While the data can be unpredictable and not always in line with official statistics, filings with the Labor Department in January under Worker Adjustment and Retraining Notification regulations hint that over 100 companies have alerted of significant layoffs.