- August brought downsizing, according to a new report by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc. Employers announced plans to cut 53,480 jobs — up 37.7% from July's 38,845 — with most cuts in the tech industry, the report showed. The August job cuts are the fourth highest this year and represent the eighth consecutive time cuts were higher than the corresponding month one year earlier, the firm said.
- The report cited uneasiness over the trade war and tariffs as a reason for the cuts. "Employers are beginning to feel the effects of the trade war and imposed tariffs by the U.S. and China. In fact, trade difficulties were cited as the reason for over 10,000 job cuts in August," said Andrew Challenger, Challenger's VP, in a public statement. "We are continuing to see investor concerns shaking confidence in the market, and employers appear to be cutting workers in response to a slowdown in demand for their products and services."
- The report found that the tech industry reported the highest number of job cuts — 15,355 — in August. State and federal governments announced 5,785 cuts last month, for a total of 11,885 for the year. Healthcare announced 5,040 job cuts in August. Challenger said that job cuts in the retail, manufacturing, energy, housing and automotive industries were notably higher last month than in August 2018, and that these industries tend to be affected by trade war, tariffs and regulations.
Recent reports on job numbers may provide employers some context for this data. In April, Challenger reported major cuts in tech jobs, which have recently represented some of the hardest to fill positions across all industries. Job cuts and gains won't likely cause any major disruptions in the labor market, however, until one significantly outpaces the other. As for long-term job results, private equity-owned retailers removed 600,000 workers from their payrolls during the past decade, even as the industry added 1 million jobs and competed for applicants by raising pay and expanding benefits to hourly workers.
The U.S. Bureau of Labor Statistics' monthly jobs report for August showed that the nation gained an estimated 130,000 nonfarm jobs. But this gain marked a second and significant decrease in jobs since June, while the unemployment rate held steady at 3.7% for three consecutive months. Challenger reported back in January that job cuts rose by 29% between 2017 and 2018. The total number of job cuts last year was 538,659, compared with 418,770 in 2017.