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Economy in Brief

Challenger Layoffs Remained High
by Tom Moeller January 7, 2009

Challenger, Grey & Christmas reported that job cut announcements in December fell back slightly to 166,348 following the indication of 181,671 layoffs during November. Despite the drop, however, the number of layoffs was nearly four times the level of December 2007.

According to the report from ADP, the service sector lost 473,000 jobs and the manufacturing industry lost 120,000 jobs.

Job cut announcements in the financial industry totaled 39,604, up more than six times from a year earlier, while layoffs in the entertainment & leisure industry totaled 6,739, up more than five times from December of '07. Layoffs in retail totaled 17,783, nearly double one year earlier, while in services there were 5,064 job cuts, up nearly ten times from one year ago. In the media industry 2,533 jobs were cut. In the auto industry 6,539 jobs were lost, electronics shed 11,520 positions and 17,968 jobs were shed from the chemical industry, up fifteen times from December of '07.

During the last ten years there has been a 67% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.

Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.

Challenger also reported that announced hiring plans were roughly stable with the prior three months.

The Challenger figures are available in Haver's SURVEYS database.

Challenger, Gray & Christmas December November Y/Y 2008 2007 2006
Announced Job Cuts 166,348 181,671 274.5% 1,223,993 768,264 839,822
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