Retail workers bore the brunt of downsizing in January, with U.S. employers announcing 45,934 job cuts, according to the latest monthly report issued by global outplacement consultancy Challenger, Gray & Christmas.
The job-cut total for January is up 37 percent from the previous month, and it is the highest since April 2016.
Macy’s plans to shutter 68 stores and lay off 10,000 workers have contributed to the concentration of job cuts in retail, which continues to be impacted by the shift toward online shopping. “Overall, it was a solid holiday shopping season, but several retailers, including Macy’s, were unable to capitalize on stronger consumer confidence and spending,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
In all, retailers announced 22,491 planned layoffs in January, accounting for 49 percent of all job cuts recorded during the month. The January total is similar to the previous January, when retailers announced 22,246 job cuts to start 2016.
A surge in hiring of late-year seasonal workers at the start of the new year had become the standard, Challenger said, but that appears to be changing. “Most retailers ramp up hiring in the final three months of the year to handle the holiday rush,” he said. “However, as consumers increasingly go online to shop, retailers are not only dismissing temporary seasonal workers, but also increasingly closing stores and laying off permanent staff.”
Retailers in January still made a strong showing in job growth relative to other industries despite the downsizing, according to the Feb. 3 labor market report from the Department of Labor, which showed that the U.S. economy added 227,000 jobs. Retail trade employment increased by 46,000 jobs over the month, primarily in clothing, electronics, appliances, and furniture and home furnishings.
Layoffs Down Significantly in Tech, Energy
Layoffs in the technology sector declined by 80 percent year over year, with tech employers cutting 2,211 jobs in the first month of 2017.
“Job cuts will not be the leading story in the tech industry this year,” Challenger said. “It is more likely to be labor shortages, particularly if the new administration continues to tighten the border to immigrants, many of whom come to America to work at leading tech companies.”
Meanwhile, the energy sector, which announced 20,103 job cuts in January 2016, reported just 1,853 planned layoffs last month.
January job cuts from oil and gas employers were 91 percent lower than one year ago. “Oil prices were already starting to rebound in the last half of 2016,” Challenger said. “Now, with an administration that is expected to be very friendly to the oil, gas and mining industries, many are forecasting a swift and sustained turnaround for these firms in 2017.”
Following cuts in the retail sector, companies in the automotive (3,365) and health care (2,250) industries rounded out the top three industries experiencing layoffs.
Ohio saw the most job cuts in January (16,104), followed by California (7,142), North Carolina (3,088), Texas (2,648) and Michigan (2,286).