Job cuts by American companies over January and February this year hit the highest since 2009, with the technology sector accounting for more than a third of the over 180,000 job cuts announced. According to a report by employment firm Challenger, Gray & Christmas Inc on Thursday (March 9), US-based employers announced 77,770 job cuts in February, down 24% from the 102,943 cuts announced in January.
“February’s total is the highest for the month since 2009 when 186,350 cuts were recorded. So far this year, employers announced plans to cut 180,713 jobs, up 427% from the 34,309 cuts announced in the first two months of 2022. It is the highest January-February total since 2009 when a total of 428,099 job cuts were announced in January and February,” the report said.
Andrew Challenger, Senior Vice President at Challenger, Gray & Christmas Inc, said that employers are paying attention to rate increase plans from the Fed. “Many have been planning for a downturn for months, cutting costs elsewhere. If things continue to cool, layoffs are typically the last piece in company cost-cutting strategies,” Challenger said in the report.
He said that at present, the overwhelming bulk of cuts are occurring in technology, adding that retail and finance are also cutting jobs as consumer spending matches economic conditions.
The sectors which are cutting jobs
According to the Challenger report on Thursday, technology, healthcare, retail, financial and fintech, and media and news announced job cuts.
Technology: The report said that the technology sector cut the most number of jobs in February with 21,387, 28% of all cuts announced last month. “The industry has cut a total of 63,216, up 33,705% from the 187 cuts announced in the same period last year. This sector has announced 35% of all job cuts in 2023,” the report said.
Healthcare: The healthcare sector- which includes hospitals and healthcare products manufacturers- announced the second most number of job cuts in February at 9,749 compared to 8,928 cuts during the same month last year. Andrew Challenger said on Thursday that while many hospitals are still struggling to retain and attract staff, others are cutting costs as economic conditions continue to soften. When it comes to healthcare product manufacturers, Challenger said that such establishments are dealing with increasing costs of doing business and cutting back staff.
Retail, financial and fintech: Thursday’s report said that retailers announced 17,456 job cuts so far this year, up 2,194% from the 761 job cuts announced in the sector during the same period last year. “Financial firms have cut 17,235, 1,401% higher than the 1,148 cuts announced in January and February last year,” the report said. It added that in January and February this year, the fintech sector announced 4,675 job cuts, 45% of the 10,476 the industry cut in all of 2022.
Media and news: Till now, the media industry announced to cut 9,738 jobs, compared to 3,774 cuts announced last year. “Of those, 906 occurred in digital, print, and broadcast News, which Challenger tracks as a subset of Media, 546 of which occurred in February. This is up 353% from the 200 News cuts which occurred through February 2022,” Thursday’s statement said.
A downfall in hiring plans
Challenger, Gray & Christmas Inc said on Thursday that there has been a downfall in hiring plans. Companies announced plans to hire 28,830 workers last month, down 12% from 32,764 hires announced in January. In February last year, 215,127 hiring plans were announced. “So far this year, companies announced plans to hire 61,594 workers, the lowest January-February total since 2016, when employers planned to hire just 15,901 workers in the first two months of the year,” the report said.
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