DJ Challenger:
US Jun Job Cuts Soar 35%
Vs May; 17-Month High
NEW YORK (Dow Jones)--Job cuts announced by U.S. corporations spiked by 35% in June from May, reaching their highest level since January 2004, outplacement firm Challenger, Gray & Christmas said Wednesday.
Announced job cuts for June totaled 110,996 compared with 82,283 in May, with most of the layoffs coming from the auto and retail sectors, the firm said.
A number of mass job-cut announcements contributed to the unexpected rise during June, the firm said, noting that downsizing activity doesnt typically pick up during the summer months.
Year-to-date, the total amount of job cuts is 14% above the comparable period in 2004, despite evidence of economic growth and payrolls gains, the firm said in a press release. The highest number of planned job cuts in June came from the auto category, with 45,378, followed by retail, with 24,065.
“The cuts are not necessarily an indication of economic weakness, but rather the by-product of numerous trends, including changing consumer demand, outsourcing, mergers and acquisitions, automation and consolidation,’ said John A. Challenger, chief executive of Challenger, Gray & Christmas.
Based on facility closings and consolidation, “the pace of job cutting in the second half of 2005 is expected to stay ahead of last year,” Challenger said.
Meanwhile, he sees a stable pace of hiring, “as companies make do with what they have...focusing on retention of solid performers, training and retraining existing workers to improve productivity and, when it is necessary to add workers, doing so in a very selective manner”
The report is an anecdotal, non-statistical tally of job-cut announcements that are reported in major media outlets. The report focuses only on job-cut announcements, not actual layoffs, and it doesn’t take into account new hires or internal transfers at companies that have announced layoffs.
Challenger, Gray & Christmas tracks layoff announcements and releases its Challenger Employment report monthly.
-By Shayna Stoyko, Dow Jones Newswires; 201-938-2137; shayna.stoyko©dowjonescom
(END) Dow Jones Newswires
July 06, 2005 10:00 ET (14:00 GMT)
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