Layoffs Up 31% From 2010

Challenger, Gray & Christmas released their 2011 Year-End Job Cut Report & Economic Outlook report. While job cuts for December are down in comparison to November, -1.6%, or 41,785, layoffs still exceed 2010 by 31%.

challenge annual layoffs 2011

While 2011 went out like a lamb in terms of downsizing activity, with employers announcing an average of just 42,339 job cuts per month over the final quarter of the year, the yeare nd job-cut total of 606,082 was 14 percent higher than the 529,973 job cuts announc ed in 2010. However, the 2010 yearend total was a 13-year low. The 2011 total is still well below the recession peak of 1288,030 annual job cuts reached in 2009.

Government slashed and burned workers. Government has shed 183,064 jobs in 2011, up 29% from 2010. The financial sector is next in layoffs for 2011 with 63,624 jobs cut. Government jobs and the financial sector accounted for 41% of the total layoffs of 2011. Between BoA and the U.S. army, there were 80,000 job losses in September 2011.

Retail sales layoffs also increased 32% from 2010 with 50,946 layoffs for 2011. Aerospace and defense contractor layoffs were up 82% from last year to a total of 34,759.

Now, we just gotta say, there is some strong bias in this Challenger, Gray & Christmas report. They literally claim skills mismatches are the reason employers aren't hiring, when there is no evidence of this by macro economic data or the skills of workers. Even worse, employers are refusing to train people, which used to be the norm before 2000, when access to global labor markets became the catch all corporate HR answer. It's clear Challenger's fictitious claim comes directly from employers and some sort of political philosophy. Multinationals often push for more foreign guest workers and other labor arbitrage tactics instead of hiring and training Americans. Training used to be an expense of corporations, a standard assumption with new hires. More and more employers push that cost onto workers or simply offshore outsource the jobs where training is cheaper.

Additionally Challenger, Gray & Christmas just declare the government can do nothing to spur job creation. That's just false and pure conservative rhetoric. There is plenty the government can do, but they simply will not, in part due to their multinational corporate lobbyist masters.

The #1 reason for layoffs is restructuring. We claim offshore outsourcing is part of this category even though the report lists offshore outsourcing separately. Corporations do not like to admit, due to bad press, they are actually offshore outsourcing jobs or bringing in cheaper foreign workers on guest worker Visas. They go to great lengths to hide this information. IBM, as an example, will not report their headcount by country. That's how many jobs IBM has offshore outsourced, it's so bad, they won't report their basic employment data.

Restructuring as the reason for layoffs was 153,113 of the 606,082 2011 layoffs. A number that is real is the jobs lost due to businesses closing. Closing businesses was 110,411 of the total 606,082 layoffs. The great U.S. worker squeeze also shows up in the reasons employers give for firing people. Cost cutting was 141,547 jobs lost of the total 2011 layoffs.

Below is Challenger, Gray & Christmas table of layoffs by sector and type. Clearly if there was a tech worker shortage, we would not see such high numbers of layoffs in computers, Aerospace, defense. If there really was a shortage of Chemical engineers, we would not see large layoffs in Pharmaceuticals most likely.

challenger layoffs

Challenger, Gray & Christmas also warn for 2012. The problem is the Post Office is under attack and could result in 120,000 jobs lost unless something is done. In Oregon the planned cuts are insane, with the only distribution center being a good day's drive away from many portions in the state. Congressman Peter DeFazio has introduced a bill, HR 3591, Postal Service Protection Act, to try to stop the inane closings and firings. Senator Bernie Sanders has introduced the sister bill in the Senate.

While the data gives some indication, from employers, on layoffs and firings, this report also illustrates the problem with private sector statistics. One must read these reports with an critical eye, to separate the political spin wheat from the data shaft.

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