Corporate Layoffs Drop in 2nd Half of ’96

Corporate job cut announcements declined in the second half of 1996 in the United States and were down 32% in December, and the slowdown in downsizing could continue this year, a consulting firm said Wednesday.

However, for all of last year, job cut announcements rose 8.5% to 477,147, said Challenger, Gray & Christmas Inc., which tracks layoff trends.

The company reported that in December, the number of announced job cuts totaled 37,402, down 32% from the same month of 1995 but up 26.6% from November.

The firm attributed the November-to-December increase to more layoffs and cutbacks in the retailing business in the final quarter of 1996 because of a slow holiday selling season, with possibly heavier reductions to come.

Despite the rise in the total number of job cuts for the year, cuts in the second half of ’96 totaled 206,634, down 24% from the first six months. John A. Challenger, executive vice president of the Chicago-based firm, said the slowdown may be a harbinger of fewer overall cuts in 1997.

“Today’s economy is strong and a tight labor market has caused companies to rethink their former stance about the disposability of people,” Challenger said. “Some companies are already stretched thin during this period of low unemployment and severe spot labor shortages.”

Challenger said he expects that some companies will continue to significantly cut jobs this year, largely in deregulated industries such as utilities, finance and telecommunications.

“Possible heavy retail cuts are looming once the numbers are in on 1996 Christmas sales,” he said.

Telecommunications led the industry sectors with the most announced job cuts in 1996 at 43,702, followed by retailing at 42,025 and computers at 36,930.

For December alone, financial companies led the job cut list with 8,491 reductions.

Challenger, Gray & Christmas publishes a job cut report monthly. Its tally includes announced layoffs as well as offers to employees by companies to take early retirement or other special consideration to leave their jobs.

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Downsizing Downtrend

More job cuts were announced in 1996 than in ‘95, but the pace eased in the second half of the year. U.S. corporate job cuts, in thousands.

Source: Challenger, Gray & Christmas Inc.