In a stark indication of economic challenges, layoff announcements experienced a substantial surge during the month of August as companies intensified their cost-cutting efforts, according to a recent study conducted by outplacement and executive coaching consultant Challenger, Gray & Christmas.
The research, unveiled on Thursday, revealed that U.S.-based employers disclosed plans to shed 75,151 jobs in August alone.
This staggering figure marked a remarkable 217 percent increase compared to the previous month, and a staggering 267 percent surge when compared to the same period in 2022.
Challenger, Gray & Christmas noted that for the entirety of this year, companies across the nation have announced their intention to reduce their workforces by a total of 557,057 positions.
This reflects a significant 210 percent rise when compared to the corresponding period in 2022 and represents the most substantial workforce reduction since the onset of the pandemic in 2020.
Was the spike unexpected?
Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, commented on the findings, suggesting that the spike in layoffs was not entirely unexpected. He attributed the increase to “technological disruption and companies adopting a cost-saving approach in response to economic conditions.” Challenger explained that the labour market appears to be undergoing a “reset” following the pandemic, transitioning away from the post-pandemic hiring frenzy. He further noted that job openings are on the decline, and workers are displaying greater reluctance to change employment.
Among the 30 sectors analysed in the study, only five managed to avoid layoffs this year. These fortunate sectors include automotive, government, entertainment/leisure, industrial goods, and utilities, showcasing their relative resilience in the face of economic turbulence.
In terms of specific industries, the warehousing sector experienced the most significant job cuts in August, with a staggering 32,123 positions eliminated. The primary contributing factor to this spike was the bankruptcy of Yellow Corp. Following closely behind were healthcare/products, which saw a reduction of 7,688 jobs, retail with a loss of 6,262 jobs, and telecommunications with 5,273 job cuts.
The tech sector
Interestingly, the technology sector, which had consistently topped the list of sectors announcing layoffs in recent months, reported a decrease in layoffs for August, with 3,198 job reductions. This represents the lowest number of layoffs in the sector since June 2022.
As businesses navigate the evolving economic landscape, the job market remains a critical indicator of the challenges and transformations faced by both employers and employees alike. The surge in layoff announcements underscores the ongoing need for adaptability and resilience in the face of economic uncertainty.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
