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Job cuts surge in May, Challenger report says

  • Cutbacks in retail and the auto industry sent job reductions soaring to over 50,000 in May, according to a report by Challenger, Gray & Christmas.
  • The total of 51,692 in May was 41 percent higher than the 36,602 job cuts announced in April and 71 percent higher than in May 2016, when employers said they would lay off 30,157 workers.

Cutbacks in retail and the auto industry sent job reductions soaring to over 50,000 in May, outplacement consultancy Challenger, Gray & Christmas reported Thursday.

The total of 51,692 in May was 41 percent higher than the 36,602 job cuts announced in April and 71 percent higher than in May 2016, when U.S.-based employers said they would lay off 30,157 workers.

Nearly 40 percent of the May cuts were announced by Ford Motor, Challenger said.

"Ford's announcement of 20,000 global layoffs to streamline and cut costs is a typical strategy of large corporations who need to pivot to stay competitive," John A. Challenger, CEO of Challenger, said Thursday morning. "As consumers demand electric and self-driving options, traditional automakers will need to adapt."

However, Ford told CNBC it never confirmed the 20,000 number with any media source and insisted the actual number of jobs eliminated was about 1,400.

Blake Palder, a spokesman for the consultancy firm Challenger, cited media reports from the Washington Examiner and Forbes as its sources for the numbers.

Officials from the media organizations didn't immediately respond to CNBC's request for comment.

According to the Challenger report, retailers had the most job cuts this year — 55,910, including 5,777 in May.

The above figures represent job cuts for 2017.
Source: Challenger, Gray & Christmas

Apparel stores are not the only retailers cutting jobs, either, the report went on.

The retail industry is starting to see more of its cuts stemming from grocery stores for the first time, Challenger Vice President Andy Challenger told CNBC's "Squawk Box" on Thursday morning. "You've seen the Jet.com purchase by Wal-Mart, ... e-commerce is coming to the grocery stores as well."

"Grocery stores are no longer immune from online shopping," John Challenger wrote in the report.

"Meal delivery services and Amazon are competing with traditional grocers, and Amazon announced it is opening its first ever brick-and mortar store in Seattle. Amazon Go, which mixes online technology and the in-store experience, is something to keep an eye on since it may potentially change the grocery store shopping experience considerably."

Job-cut announcements by sectors

Source: Challenger, Gray & Christmas

In May, health care and products companies announced 3,054 job cuts, and the service industry announced plans for 4,082 reductions.

Challenger's data come a day before the closely watched monthly employment report by the Bureau of Labor Statistics.

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