Companies Step Up the Pace of Layoffs
Planned layoffs at U.S. companies jumped 26 percent in July from June, depicting further deterioration in the labor market, a report showed on Monday.
Planned layoffs at U.S. companies totaled 103,312 in July, compared with June's 81,755, employment consulting firm Challenger, Gray & Christmas Inc said.
Announced job cuts at U.S. companies last month were the second highest total so far in 2008, more than double the 42,897 a year earlier, the report said.
The transportation industry hurt by sky-high fuel costs accounted for the most planned cuts in July with 17,051. The financial sector battered by the credit crisis followed with 15,517 cuts. Retailers facing a pullback in consumer spending came next with 12,160 layoffs.
Airlines have been responsible for the bulk of the planned layoffs in transportation sector, which has been squeezed by expensive fuel, according to John Challenger, chief executive officer of Challenger, Gray & Christmas.
"At the same time, many cash-strapped Americans are increasingly frustrated by higher ticket prices, baggage fees, airport delays and canceled flights that they are simply forgoing vacations that require air travel and staying closer to home," Challenger said in a statement.
From January to July, planned layoffs totaled 579,260, up 33 percent from the same period a year ago.
Financial companies, in particular mortgage lenders, have been slashing their payrolls, prompted by billions of losses and write-downs tied to soured investments on housing and mortgages.
So far this year, planned layoffs in the mortgage and subprime sector has reached 92,547, already surpassing the 2007 tally of 86,126.
With no end in sight, job hemorrhage in the financial sector could surpass the last year's record total of 153,105 by the end of October, Challenger predicted.
If the economy continues to grow below-trend for several quarters or even years, "it will seem like we are in a recession, particularly for job seekers," he said.