Employment cuts are droppingDate posted: 4/30/14 06:15:00 AM
The first quarter of each year often holds some of the steepest job cuts in America, according to John Challenger, CEO of Challenger, Gray & Christmas, a global outplacement consulting firm. But figures reported from Challenger, Gray & Christmas showed the first quarter of 2014 had the fewest first-quarter job cuts in 19 years.
"Since we began tracking planned layoffs in 1989, the first quarter is only slightly lower than the fourth quarter when it comes to the pace of downsizing, with an average job-cut total of just over 205,000," Challenger said. "Employers are well below that pace this year, suggesting that layoffs continue to decline in a recovery that is approaching its five-year anniversary."
The first quarter concluded with 34,399 jobs cut in March, the second lowest monthly total since January 2013. The March total was 18 percent lower than the 41,835 expected job cuts reported in February. The March total was also 30 percent lower than a year ago when March job cuts reached 49,255.
The lowest month for job cuts in recent years came in December 2013 when just 30,623 employees lost their jobs, according to Challenger, Gray & Christmas.
A cut on job cuts
Employers trimmed 121,341 jobs from payrolls through the first quarter of 2014, a 16 percent drop from the 145,041 cuts reported in the same span in 2013, according to Challenger, Gray & Christmas. The first-quarter total this year was nearly identical to the fourth quarter of the previous year, as only 326 more jobs were cut during the last three months in 2013.
The first-quarter total marked the lowest three-month span for job cuts since the second quarter of 2013 when the nation lost 113,891 jobs. However, as job cuts are often higher in the first quarter of the year, a better statistic would be to compare it against other first quarters, and 2014 had the lowest amount of jobs lost since the first quarter of 1995.
"While employment has not yet reached an ideal level, the U.S. is moving closer to the tipping point for substantial job growth," said Matt Ferguson, CEO of CareerBuilder and co-author of The Talent Equation. "The economy is expanding, the housing market is recovering, consumer confidence is up and companies are starting to tap into cash reserves to invest - these are all good signs. As these trends strengthen, we expect hiring to hold steady in the second quarter and gain ground in the back half of the year."
Job cuts by sector
It's of little surprise that the retail sector led the nation in job cuts over the first quarter. The sector, which tends to let employees go after the busy holiday season, cut 18,231 jobs through the first three months of the year. The financial sector was second in line with 15,306 employees losing their positions.
But neither of those two sectors had the largest job cuts in March. The healthcare industry let the most people go last month, decreasing its job total by 5,768 employees. The healthcare industry has now cut the fourth most jobs of any industry since the start of 2014, with 10,984 jobs slashed.
"We continue to see downsizing in the health care sector, as hospitals adjust to lower Medicare reimbursements and cutbacks in Medicaid funding," Challenger said. "There has also been a surge in job cuts among the workers hired to sign-up Americans for health insurance under the Affordable Care Act. With the sign-up period ending on March 31, call centers around the country have been purging their payrolls of these temporary employees."
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