Job cuts rise in June, but 2013 six-month total is down

July 3, 2013 at 8:51 AM
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CHICAGO, July 3 (UPI) -- Layoffs in the U.S. job market rose May to June, but shrank in the first half of the year compared with the first half of 2012, a private employment firm said.

Outplacement firm Challenger, Gray & Christmas said there were 39,372 announced layoffs in June, which was 8.2 percent higher than the 36,398 announced in May.

From January through June there were 258,932 job cuts announced, which is 8.5 percent fewer than the first six months of 2012, when announced job cuts came to 283,091.

The firm said from 2000 to 2013 only 2011's first half of the year job-cut total of 245,806 was lower than this year's total at the half-way point of the year.

The improvement trend has not been shared by every business sector, however. Of the top five job-cutting industries for the year, the financial service sector has seen 82 percent more job cuts January through June this year compared with the same period of 2012. In the retail sector, the six-month total for 2013 is 38 percent higher than the same period of 2012. More jobs cuts were also posted by healthcare during the same comparison period, up 62 percent.

In the computer industry, job-cut announcements surged in June to 10,133, contributing more than 50 percent of the total for the industry to date in 2013, which is 19,930.

Education also had a tough month in June with 5,629 announced layoffs. That's a significant portion of its 12,656 announced layoffs year to date. But compared to 2012, the figures look promising. There were 24,815 announced layoffs in 2012 in the first six months of the year.

"Threats to job security still exist ... in the form of federal spending cutbacks stemming from sequestration as well as potential fallout from implementation of health care reform," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.

Challenger said the most job cuts related to healthcare reform have been the direct result of lower Medicare reimbursements, which have contributed to cuts in healthcare jobs.

"As 2014 approaches, we could see more cuts related to healthcare reform as smaller employers, who are mandated to provide coverage if they have 50 or more full-time workers, cut the number of workers and/or hours to remain under the 50-worker threshold," Challenger said.

While small firms could make cuts to duck under the 50-employee threshold, larger firms could cut workers simply to find savings to make up for increased expenses brought about by healthcare reform, Challenger, Gray & Christmas said.

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