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US job cuts plunged 33% to 41,034 in May: Challenger

Job cuts announced by U.S.-based companies declined sharply in May as the energy sector took another pause following successive rounds of big payroll reductions.

Employers laid off 33 percent fewer workers in May from the previous month, global outsourcing firm Challenger, Gray & Christmas reported Thursday. Companies announced 41,034 cuts in the last four weeks, compared with 61,582 in April.

The report comes a day before the Labor Department releases its closely watched monthly jobs data for May.

To date, employers have handed out 242,830 pink slips in 2015, a 13 percent increase from the same period last year.

Read MorePrivate businesses create 201,000 jobs in May vs. 200,000 est.: ADP

The financial sector, having announced 5,539 layoffs in May, saw the highest number of workplace reductions.

"We saw companies, particularly JPMorgan, dominating this space this month, announcing cuts to teller positions that are kind of being outdated. As technology has changed, they've kept many of those employees on," John Challenger, CEO of Challenger, Gray & Christmas, told CNBC's "Squawk Box."

Government was a close second at 5,502 cuts, most of which were announced by Massachusetts in an effort to close its budget gap.

Challenger expects state governments to be significant contributors to future layoffs this year.

"There are so many states that have bad budget deficits. We saw Massachusetts take some significant action, try to get at that by offering early retirement packages and potential layoffs will follow that, so I think we'll see other states follow that same path," he said.

The U.S. energy patch trimmed payrolls by 2,654 positions compared with 19,745 in April. A little more than 1,000 layoffs in May were directly attributed to lower oil prices.

The energy sector has announced job reductions in the tens of thousands in three of the last five months.

Read MoreWorst of energy industry layoffs may be over...for now

Oil and gas firms may hold off on further cuts so long as crude prices continue to remain stable, Challenger said. U.S. crude futures have consolidated around $60 per barrel in the last five weeks.

"We certainly know that energy is at risk. This may be a lull. This may be a point where we've hit stabilization there," he said.

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