After eight months of steady job growth in 2010 and a gradual lowering of the unemployment rate, November was the worst month for job cuts for the entire year. But as one outplacement firm that tracks layoffs and hiring closely reminds us, the last quarter of the year is the time when job cuts historically arrive.
The two largest segments of job loss as tracked by Chicago-based Challenger, Gray & Christmas was the U.S. government and non-profit organizations. Job cuts for technology professionals totaled about 2,812 last month in aerospace and defense, telecommunications, and computer segments. Health care, including the pharmaceutical segment, lost over 6,000 jobs last month.
"Government and non-profit job cuts are down 16 percent from a year ago, but that is probably little consolation to employees in the sector, which is still struggling despite signs of recovery in other areas of the economy," said John A. Challenger, CEO of Challenger, Gray & Christmas, in a Dec. 1 statement. "Unfortunately, 2011 may not offer much respite for workers in the sector as many newly elected members of Congress are pushing for significant federal spending cuts. Job cuts that have been concentrated at the state and local level could expand to include federal workers in the new year."
Job cuts between January and November of this year were under 500,000. Compare that to 2009 when there were 1.2 million cuts over the same period, and you notice a significant overall decline, explained Challenger, Gray & Christmas in its layoff report. Many economic analysts had predicted November job cuts to continue to diminish after solid October numbers, but as Challenger reminds us, layoffs are the norm in the fourth quarter of almost any year.
"The November increase in job cuts is not indicative of a broader trend," said Challenger in the same statement. "Historically, job cuts tend to increase in the final months of the year. This is the period when many companies make budget and payroll decisions for the coming year."
Another bright spot Challenger pointed out included hiring announcements of 26,012 last month, mostly in retail.