The Challenger report on layoff intentions in October was up 21.0% to 50,274 from 41,557 in September. The level was down 33.5% from the 75,644 in October 2018. Much of the month-over-month increase can be attributed to a layoff announcement for 9,000 workers at Hewlett-Packard.
It is important to remember that layoff announcements — like the one at HP which will not be all at once — are for intentions. This can mean that currently open spots won’t be filled, or that cuts can happen over a period of months or years and may not be fully implemented.
The HP announcement was a significant portion of the 15,898 cuts in technology which accounted for 31.6% of the total 50,275. There were also large numbers of job cuts announced for retail (6,127) and healthcare (5,400).
The for the first 10 months of 2019, job cut intentions totaled 515,144, a significant rise from the 441,702 in 2018. While cuts in the retail sector remained elevated in 2019 to-date (71,485) the pace is slower than the same period in 2018 (92,735). Job cut announcements for industrial goods are starting to accumulate for 2019 (63,505) which is a significant pick up from the same period in 2018 (22,446). Automotive is also seeing an acceleration in job cuts this year (43,025) compared to the same time last year (14,489). There are clearly a few sectors that are adjusting to changes in technology and consumer behavior. However, the upswing in layoffs for industrial goods may be part of a more fundamental deterioration in that sector.
Reasons cited for cutting jobs were more diverse in October. The main reason given was restructuring (20,301, or 40.4% of the total) followed by closing (9,822, or 19.5% of the total). What is interesting is that some businesses attributed their cuts to specifically to tariffs (1,368). Another curious reason was low interest rates (200) which suggested that not all businesses are benefiting from lower borrowing costs.
Hiring intentions were high at 190,835, but a lot of this was intentions in retail (171,300) and transportation (6,817) which are related to the need for seasonal workers. There was also a rare notation of government hiring intentions (5,000) which is likely related to the 2020 Census. If these three are excluded, hiring intentions are a modest 7,718 of which technology (4,124) aerospace/defense jobs were the strongest (1,250). The underlying pace of intentions to hire is a bit slower, but no much, and the jobs being added are generally those with higher wages and benefits.
The October level of intentions for retail workers is meatier than usual, but probably reflects the caution evident in the September number of intentions. The total for the two months is still behind that seen in 2018, but is otherwise one that reflects optimism about the holiday spending season. Plans to add workers in the transportation sector were stronger than typically seen in October. In conjunction with September’s data points to the need to serve on-line shoppers this year.
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.