A wave of private-sector downsizing pushed the number of announced job cuts by U.S. employers to a 16-month high in July, according to a report released Wednesday.
The 66,414 announced job cuts last month were up 60 percent from the previous month, according to the report by the Challenger, Gray & Christmas outplacement firm. The July figure was 59 percent higher than the planned layoffs announced in July 2010.
July’s planned cuts represented the largest monthly total since March 2010, when 67,611 job cuts were announced by the nation’s employers, Challenger said.
The July increase was dominated by a handful of private-sector employers, Challenger said. They include Merck & Co., Borders, Cisco Systems, Lockheed Martin and Boston Scientific. The job cuts from these five companies alone accounted for 57 percent of the July total.
Despite the increase in planned job cuts, the pace of downsizing in 2011 remains slower than 2010, Challenger said. So far this year, employers have announced 312,220 cuts — 8 percent fewer than in the first seven months of 2010.
But the trend has been getting worse recently.
“July marks the third consecutive increase we have seen in monthly job-cut announcements, which certainly seems to provide additional evidence that the recovery has stalled,” John Challenger, CEO of the firm, said in a statement. “What may be most worrisome about the July surge is that the heaviest layoffs occurred in industries that, until now, have enjoyed relatively low job-cut levels, including pharmaceuticals, computer and retail.”
Pharmaceuticals led all industries with 13,493 job cuts in July, Challenger said. It was the first time in seven months that government was not the top job-cutting sector. Government was the third largest job-cutting sector in July (9,389 cuts), behind retail, where employers announced 11,245 cuts.
On Friday, the government will release the nation’s jobless rate for July. Many economists are predicting it will remain unchanged at 9.2 percent.
– Henry Unger, The Biz Beat
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