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First Cut: Challenger report April layoffs continue downward slide after February peak

The Challenger report on layoff intentions in April fell 33.9% to 40,023 compared to 60,587 in March and the near-term peak of 76,835 in February. The level was up 10.9% compared to the 36,081 in April 2018. Continued contraction in brick-and-mortar retail outlets is driving much of job cut intentions. Nonetheless, the influence is less so than it was. Businesses are still anxious to hold on to experienced workers but slower expansion in the economy and efforts to automate at a time when qualified applicants are relatively scare are leading businesses to adjust their payrolls.

The largest increases in layoff intentions in April were in industrial (5,159 or 12.9% of the total), consumer (4,705 or 11.8% of the total), automotive (3,915 or 9.8% of the total), and services (3,224 or 8.1% of the total). The composition of the biggest planned cuts suggest that industries are preparing to produce and provide less at a time when consumers are expected to spend less.

The largest share of reasons provided for planned job cuts were attributed to closing (8,479 or 21.2% of the total), no reason (7,955 or 19.9% of the total), and restructuring (5,838 or 14.6% of the total). It is unusual to see “no reason” to be given for more than a handful of responses. This suggests a reluctance to categorize the thinking, or that one reason doesn’t dominate the planning.

Hiring intention in April totaled 258,302, the vast majority of which was related to a one-time announcement of 250,000 planned hires at McDonald’s fast food chain. The remaining 8,302 was strongest for technology (1,400 or 16.9% of the total), insurance (1,300 or 15.7% of the total), and FinTech (1,280 or 15.4% of the total). Outside the big swing in the retail sector, hiring plans remain firm and for areas traditionally associated with better wages and benefits, and more secure employment.

 

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