Don't Get Down: Jobs Cuts Have Come to an End
by Traci K and BrightMove Recruiting Software
We may have seen the light at the end of the tunnel. The year came to a close with the lowest monthly job-cut total since 2000, according to the 2010 year-end job-cut report released Jan. 5, 2011, by global outplacement consultancy Challenger, Gray & Christmas Inc.
Planned layoffs totaled 32,004 in December 2010, down 34 percent from 48,711 in November 2010. December job cuts were 29 percent lower than the same month a year earlier when 45,094 cuts were announced.
The December decline marked a fitting end to 2010. The 529,973 job cuts announced during the year were 59 percent fewer than the 1,288,030 layoffs recorded in 2009, the largest downsizing year since 2002, when 1,466,823 U.S. jobs were shed. The 2010 total was the lowest since 434,350 job cuts were announced in 1997.
“Per (SHRM), the message was clear – downsizing is now a theme of the past, albeit the recent past. The news is still promising. The rates of downsizing in corporations across the United States in 2010 were at their lowest levels since 1997. SHRM reports that:
phase of the recession really came to an end in 2009,” when it had reached a seven-year high, said John A. Challenger, CEO of Challenger, Gray & Christmas. “Job cutting fell dramatically in the second half of . The pace of downsizing continued to slow in 2010 to levels we have not seen since before the 2001 recession.”
|Job Cuts for Top Five Industries (2010 v. 2009)|
|Source: Challenger, Gray & Christmas, January 2011|
Nearly every major industry category saw job cuts decline in 2010—some by more than 90 percent, Challenger reported. Layoffs in the automotive sector, for example, fell 91 percent from 174,192 job cuts in 2009 to 16,001 in 2010. Industrial goods manufacturers saw job cuts plummet 79 percent from 125,423 to 26,487. Retail employers, which had 98,807 job cuts in 2009, announced 38,751 layoffs in 2010—a 61 percent drop.
Even government and nonprofits, the largest job-cutting sector of 2010, experienced a 17 percent drop in layoffs. However, this struggling sector still was forced to eliminate 142,255 positions in 2010. That was 165 percent more than the second-ranked pharmaceutical industry, which announced 53,636 layoffs in 2010.
What does this all mean? Organizations will not necessarily be hiring right now, but it shows they probably will be soon, with the exception of possibly the government sector. “Unfortunately, the government sector is likely to see heavy job cuts again in 2011 as the budget shortfalls that existed in 2010 continue into the new year,” Challenger noted. “In fact, the sector could see an increase in job cuts in 2011 as state and local agencies, which saw the heaviest downsizing [in 2010], are joined by federal agencies under increasing pressure from a Congress determined to cut spending.”
As well, the job market didn’t have a banner year, even with the drop in job cuts. “The private sector did experience 11 consecutive months of net job gains, as of November , but the gains were relatively small, not nearly enough to make a dent in unemployment.” According to Challenger:
“Re-engaged job seekers who were not counted among the unemployed while they gave up their search, coupled with newly laid-off government workers, could put upward pressure on the unemployment rate.
“Unemployment will probably remain high throughout 2011,” he said. “In fact, it could venture north of 10 percent again before the end of . Hiring in the private sector is expected to once again be slow and steady—too slow to offset losses in the government sector. However, hiring is likely to be significant enough to entice individuals who abandoned their job searches in 2009 and 2010 to re-enter the labor pool.”
He added that further job-search competition will come from people who are currently employed. “They may have already seen some of their colleagues move to greener pastures, so they will be even more tempted to test the waters in 2011. Companies that are not quite ready to accelerate hiring will be required to focus more energy on retaining existing employees.”
Now that corporations have made the necessary cutbacks to sustain profitability, how do they continue to do so with the decreased staff they now have? As well, reassessing the “mix” of current employees may be key when discussing any additions to staff in the upcoming year. Look for next week’s post for tips and information on stepping up to these adjustments.
Traci K. is an HR Professional and freelance writer based in the Midwest, specializing in recruitment and immigration. When she’s not improving unemployment, she keeps busy with her husband and four children.