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Job cut announcements declined in July

Aug. 1, 2013 at 8:44 AM   |   Comments

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CHICAGO, Aug. 1 (UPI) -- Job cut announcements from U.S. companies dropped 4.2 percent June to July, a private employment firm said Thursday.

Challenger, Gray & Christmas said 37,701 layoffs were announced in July, compared to 39,372 in June.

Compared to July 2012, the figure was 2.3 percent higher, involving 36,855 job cuts.

From January through July, U.S. firms announced 296,633 job cuts, which is 7.3 percent fewer than the 319,946 job cuts announced in the first seven months of 2012.

U.S. employers are at a 42,376 job cuts per month pace this year, which, projected through the end of the year, would put the year's total at 523,362 layoff announcements. That would be the lowest annual total since 1997 when 434,350 job cuts were announced.

July also included at least one significant announcement of intentions to hire. Online retailer Amazon.com said it was seeking to hire 5,000 new warehouse workers.

The healthcare sector announced the most job cuts in July with 6,843.

Healthcare firms announced 29,794 planned layoffs this year, 59 percent more than the 18,770 planned job cuts announced by this point in 2012, Challenger, Gray & Christmas said.

"Cuts in Medicare reimbursements brought about by sequestration and healthcare reform are hurting hospitals' bottom line. Some states are also cutting Medicaid funding, which adds to the financial challenges. Hospitals are also reporting fewer patients as high-deductible insurance policies discourage would-be patients from seeking health services. As a result of these factors, healthcare providers, which had been one of the country's best job generators in recent years, are being forced to reduce their headcounts," said John Challenger, chief executive officer of Challenger, Gray & Christmas.

Aerospace and defense followed healthcare with 4,889 job cuts announced in the month.

From January through July, the industry has announced 22,750 job cuts, a 20 percent gain from the first seven months of 2012.

"This industry is always at high risk for restructuring due to the fact that it relies on a steady flow of government contracts," Challenger said.

"Between sequestration, general federal spending cuts, the conclusion of two wars and shifting strategies in the use of our military, there are many challenges facing this industry," he noted.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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