The number of planned layoffs by U.S. employers rose to a nearly two-year high in January as the energy industry slashed jobs in the face of falling oil prices, according to a report by Challenger, Gray & Christmas.
Employers planned to let go 53,041 jobs in January, up 63 percent from the 32,640 layoffs announced the previous month. Total job reductions last month were the highest since February 2013.
Challenger said 21,322 cuts—about 40 percent—were directly related to oil prices. The number of layoffs in the energy industry in January was 42 percent greater than all job cuts in the sector last year, when oil and gas employers let go just 14,262 workers.
The cost of crude has plummeted up to 60 percent since peaking last June, prompting oil companies to scale back budgets and cancel planned projects.
The fallout from the low commodity price market spilled over into the industrial goods manufacturing sector, which supplies drillers and announced 4,859 job cuts in January.
"We may see oil-related job cuts extend well beyond those industries directly involved with exploration and extraction. The economies throughout the northern United States that have been thriving as a result of the oil boom could experience a steep decline in employment across all sectors, including retail, construction, food service and entertainment," John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.