Layoffs Hit New Low

Planned job cuts declined in March to the lowest level since May 2011, as U.S.-based employers announced layoffs totaling 37,880 during the month, according to the latest job-cut report by global outplacement firm Challenger, Gray & Christmas, Inc.

The March total was 27 percent lower than the 51,728 job cuts announced in February and nine percent lower than March 2011, when 41,528 planned layoffs were recorded. It was the lowest monthly layoff tally since 37,135 job cuts were announced last May.

Through the first quarter of 2012, employers have announced 143,094 job cuts, up 9.4 percent from 2011 when first-quarter cuts totaled 130,749. Last year's first quarter saw the fewest planned layoffs since 97,716 were announced in the first three months of 1995.

Telecommunications firms saw the highest number of planned job cuts announced in March with 4,089. Nearly half of that total (1,900) came from a single announcement by cellular service provider T-Mobile, which is consolidating call centers in an effort to reduce costs. Call center workers were hit hard by March layoffs. Verizon Wireless also announced the closing of a call center resulting in 750 job cuts. Additionally, Wells Fargo and television/online retailer QVC each announced call center job cuts, impacting a combined 685 workers.

Year-to-date, consumer products is the leading job-cutting sector, having announced a total of 18,438 layoffs in 2012, including 2,118 in March. That represents a fourfold increase from 2011, when these firms announced just 4,571 job cuts through the first three months.

The second-ranked transportation sector has seen an equally large jump in job cuts. Through March these employers have announced 17,051 cuts, up 569 percent from the 2,547 job cuts announced by this point a year ago.

Both consumer products and transportation saw fewer job cuts in March after experiencing heavy cuts in February. These are key indicators of the economy's health, so they will be closely monitored in the coming months for more signs of distress.  The hope is that the February surge in these sectors was not indicative of a trend, said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

Notably absent from the list of top job cutters is the government sector, which has seen just 5,750 job cuts this year. That is down 86 percent from a 2011 first-quarter total of 41,929.

This may simply be the eye of the storm for government workers; a lull in activity in an election year and a time when many state budgets are still being negotiated. The potential for a surge in government cuts is significant. Massive cuts in the U.S. Post Office are still being considered. Last month, the U.S. Department of the Interior was asked to develop a plan that would eliminate 5,000 workers by the end of fiscal year 2013. In Illinois, the governor has proposed a budget that would result in 2,700 job cuts. So, we definitely have not seen the end of large-scale government layoffs, noted Challenger.

Neither the Department of Interior cuts nor the proposed cuts for State of Illinois workers has been included in Challenger's monthly job-cut figures, as both remain unofficial and subject to negotiations and other factors.

One sign that local governments are still struggling from budget shortfalls is the fact that job cuts in education jumped 192 percent from 1,275 job cuts in February to 3,733 last month.  School districts continued to be adversely impacted by weakened state and local budgets. These cuts are a strong indicator that more government cuts are on the horizon, said Challenger.