January Spike in Job Cuts From Retailers and Tech Companies

24/7 Wall St.

View gallery

.
111861925
The latest monthly Challenger, Gray and Christmas job cuts survey finds layoffs jumped nearly 50% in January, after hitting a 13-year-low in December.

U.S.-based employers announced plans to cut more than 45,000 jobs last month. That was 47% higher than in the previous month, as well as 12% higher than in January of 2013.

The retail sector was hit especially hard. Major national retailers like Best Buy and Target were among those that announced more than 11,000 job cuts last month. That was about 71% more than in the same period of last year.

And it was more than just temporary seasonal workers that got the ax, but full-time permanent workers as well, both in stores and in corporate offices. Macy’s Inc. (NYSE: M) said it would reduce its headcount by 2,500, and struggling J.C. Penney Co. Inc. (JCP) planned to let go 2,000.

John A. Challenger, CEO of the global outplacement firm, said:

Holiday sales gains were relatively weak and many retailers achieved the gains by slashing prices on their products, which adversely impacted their year-end earnings. The post-holiday job-letting in the sector was inevitable.

The tech sector ranked second in January job cuts. Tech employers expected to shed more than 6,400 jobs during the month, or 146% more than in January of last year. Intel Corp. (INTC) and EMC Corp. (EMC) were among the leaders in that category. According to Challenger :

In both cases, the cuts were due to shifts in business strategies. In these situations, it is not uncommon for job cuts to occur in one area while hiring occurs in another. In fact, EMC indicated in its announcement that it expects to end 2014 with the same number of employees it had to begin the year

The financial, transportation and health care industries rounded out the top five in announced job cuts for the month. Restructuring was cited as the most common reason for reducing workforces after the start of the new year.


Filed under: Economy Tagged: EMC, INTC, JCP, M

View gallery

.

Rates

View Comments (1)