Job cuts decline, even as oil prices take toll
From Illinois Business Journal news services
CHICAGO – Following two consecutive months of job cuts in excess of 50,000, the pace of downsizing slowed significantly in March, as U.S.-based employers announced plans to trim payrolls by 36,594 during the month, according to new figures released Thursday morning by global outplacement consultancy Challenger, Gray & Christmas, Inc.
The March total was 27.6 percent lower than the 50,579 job cuts in February. It was the lowest monthly total since December, when 32,640 were announced.
Despite last month’s decline, the March figure was 6.4 percent higher than the same month a year ago (34,399), making it the fourth consecutive year-over-year increase.
Through the first quarter of 2014, employers announced 140,214 job cuts, up 15.6 percent from the 120,341 cuts tracked the first three months of 2014. The first quarter saw 17 percent more job cuts than in the final quarter of 2014, when 119,763 job cuts were recorded.
Of the 140,214 job cuts announced in the first quarter, 47,610 were directly attributed to falling oil prices.
“Without these oil related cuts, we could have been looking at one of lowest quarters for job-cutting since the mid-90s when three-month tallies totaled fewer than 100,000. However, the drop in the price of oil has taken a significant toll on oil field services, energy providers, pipelines, and related manufacturing this year,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.
First quarter job cuts were dominated by the energy sector, where employers announced 37,811 job cuts in the first three months of 2015. The three-month total is up a whopping 3,900 percent compared to a year ago, when fewer than 1,000 energy cuts were reported.
“Oil companies are not the only energy-related firms who are getting hit this year. Coal mine closings in West Virginia and elsewhere around the country are also costing jobs,” noted Challenger.
The good news is that the pace of energy-sector job cuts appear to be slowing. Only 1,279 job cuts were announced by energy firms in March, which is 92 percent fewer than the 16,000 announced in February.
The retail sector has tallied the second highest number of job cuts this year, with 22,502 planned layoffs through the first three months of 2014. That figure includes 6,640 in March, most of which were due to a major announcement from Target.
While energy and retail top the year-to-date job-cut tallies, the heaviest job cutting in March occurred among industrial goods manufacturers, whose payroll reductions totaled 9,383 during the month. That brings the sector’s 2015 total to 17,738, which ranks third among all industries.
“Oil prices impacted energy firms directly at the end of 2014 up until February. Now, peripheral manufacturers are losing contracts and laying off workers in an effort to limit major losses,” noted Challenger.
The flip side of losses due to oil prices appear to be occurring in automotive and transportation hiring. Automotive manufacturers announced over 7,000 new jobs so far this year, according to Challenger tracking. That is up from just over 2,000 by this time last year. Meanwhile, companies in the transportation sector have announced over 6,700 new jobs, compared to just over 2,000 through the first quarter of 2014.
“This is just a fraction of the actual hiring occurring across the country, but a jump in these numbers suggest auto and transportation companies are benefitting by the oil slump which could ultimately positively impact consumers,” said Challenger.