July 2011 turned out to be the month of bad news for employees of some of the world’s most recognized companies. According to a new report from Challenger, Gray & Christmas, planned job cuts skyrocketed by 59 percent compared to July 2010 figures and 60 percent from June 2011.
Last month, businesses and government agencies announced that 66,414 jobs would be cut, the highest figure reported in 16 months. At a time when the job recovery situation is questionable, the announcement of tens of thousands of new job cuts is ominous.
Five companies are responsible for more than half of the July figures. Planned layoffs at Merck & Co, Borders, Cisco Systems, Lockheed Martin and Boston Scientific totaled 38,100.
In July, the pharmaceutical industry announced 13,493 job cuts of which 13,000 came from Merck’s announcement. Private industry's planned downsizing pushed the government sector out of the top spot for the first time in seven months. The government sector’s plan to cut more than 9,300 jobs is even less than the retail sector’s loss of 11,000 positions. The large number of planned cuts in retail comes as a result of Borders store closings.
Planned layoffs were also high in the IT industry. Information technology industry cuts for the first six months of the year totaled 3,178 but July’s announcements brings the year-to-date number up to 11,148. In July, 7,970 IT industry jobs cuts were announced with the bulk of these cuts being made by Cisco Systems (6,500).
John A. Challenger, chief executive officer of Challenger, Gray & Christmas, commented on job losses, “It has been a couple of years since we have seen this level of private-sector job cuts coming in a single month. The spurt of layoff announcements in July also stood out because they came from major employers in bellwether industries, all within a span of a few days. A casual observer certainly might conclude that the wheels just fell off the recovery wagon.” Source: ChallengerGray.com (PDF)
Challenger goes on to explain that while the numbers are alarming, they are nowhere near the average 105,000 job cuts announced per month between January 2008 and December 2009.
While the job cut announcements are lower than they were just two years ago, the surge in layoffs is definitely something that will cause more questions and concerns about the nation’s overall economic recovery.