US job cuts rise in December as year-end total falls from 2015, Challenger report shows

December job cuts up 25%: Challenger
December job cuts up 25%: Challenger

U.S.-based employers announced they would cut 33,627 jobs in December, up 25 percent from November's yearly low, according to a monthly report released on Thursday by global outplacement consultancy Challenger, Gray & Christmas.

The layoff total for December was up 42 percent from December of last year, which saw the lowest monthly total in over 15 years. Still, the report said, the total for December of 2016 was far below the annual average of 43,910 cuts.

In 2016, U.S. companies announced a total of 526,915 job cuts, down 12 percent from last year's total. December's pink slips brought the 2016 total to settle just under the 2010 average, the first year of recovery after the 2008 financial crisis.

"As long as unemployment stays low, employers are really being very careful about laying off people," Challenger CEO John A. Challenger told CNBC's "Squawk Box."

But when the time comes to restructure, they're not shy about it, Challenger added. "If a company says, 'Our business is shifting and we need to change,' they don't wait like they used to until the recession hits," he said.

The energy sector saw the highest number of layoffs in 2016, totaling 107,714 cuts over the course of the year – up 14 percent from 2015. Most of the cuts occurred in the first half of the year, when the industry came under pressure from historically low oil prices.

"Oil prices are back on the rise. The new administration poised to take over the White House in January could further benefit the industry by relaxing regulations and drilling restrictions," Challenger said in the report.

"Oil companies may once again start to expand in 2017. Ironically, the only obstacle in their way may be a shortage of skilled workers," Challenger said in the release.

The computer industry followed energy as one of the biggest 2016 job cutters, laying off 66,821 workers during the year, up over 7 percent since 2015.

In the report, Challenger cited "multi-year transformations" to services from hardware at longtime hardware makers like IBM and HP as cause for the layoffs. He said that other tech giants like Microsoft, Dell, and Intel are also undergoing shifts to mobile and trying to boost productivity.

"It is hard to say how the tech sector will do under the new administration. Many rely on offshoring as well as the employment of foreign talent immigrating to the U.S. Both of those business practices are likely to come under threat in the coming year," Challenger said in the report.

"Only time will tell," the CEO concluded.

The top 5 job-cutting sectors of 2016 – energy, computer, retail, industrial goods, and financial – still saw their job cut totals decrease year over year. Texas, California, Arkansas, New York, and Illinois were the hardest states hit by layoffs year to date.

Also on Thursday, ADP and Moody's Analytics released its National Employment Report tracking estimates of private nonfarm payroll employment. These two reports come just one day before the U.S. Bureau of Labor Statistics releases its official nonfarm payroll numbers.