Job cuts increased for a third consecutive month in November, as employers announced plans to drop 57,081 workers from their payrolls. That's an increase of 20 percent from the previous month when announced layoffs totaled 47,724, according to the latest report from outplacement consultancy Challenger, Gray & Christmas, Inc.
November cuts were 34 percent higher than the 42,474 job cuts announced by employers a year earlier. Last month was only the fourth time this year that job cuts exceeded 50,000.
Employers have now announced 490,806 job cuts this year. Despite the faster pace of downsizing as the year comes to a close, the year-to-date total is 13 percent lower than the 564,297 job cuts announced through November 2011.
Hostess bankruptcy a factor
The November surge was led by the food industry, which saw 19,709 cuts during the month. The bulk of those resulted from the bankruptcy of Hostess Brands which, after years of declining sales of its high-calorie snack cakes in a more health-conscious America, was forced to shut its operations and dismiss all 18,500 employees.
The next largest job-cutting industry was the computer sector, which announced 3,313 job cuts in November -- up 208 percent from the 1,076 announced by these firms in October. The computer industry remains the top job-cut industry for the year, with a total of 45,060 announced firings since January. About 60 percent of those cuts, however, were the result of the 27,000 job cuts announced by Hewlett-Packard in May.
“Job cuts this year have really been driven by a handful of large-scale cuts. This month, the Hostess cuts dominated the monthly total,” said Rick Cobb, executive vice president of Challenger, Gray & Christmas. “Last month, nearly a quarter of the 47,724 job cuts came from Ford. In May, it was the single job cut by HP that drove the monthly job cut total to 61,887, which is the highest level we have seen so far this year.”
“The approach of Christmas is not likely to provide any relief from large-scale layoffs. In fact, the end of the year tends to see heavier downsizing activity, as companies make last-minute attempts to meet earnings goals or adjust payrolls based on the budget for the coming year. As if to prove this point, Citigroup announced 11,000 job cuts yesterday,” noted Cobb.
The Citigroup job cuts, which followed the sudden ouster of CEO Vikram Pandit in October, will be included in Challenger’s December tracking.