Video: Sour summer for layoffs

updated 9/3/2008 10:57:15 AM ET 2008-09-03T14:57:15

Job cuts announced by U.S. employers last month jumped 12 percent over a year ago to cap the busiest summer of downsizing in six years, according to a report released Wednesday.

The monthly job reductions slowed somewhat from July but still exceeded the year-ago figure for a seventh time in 2008, according to the report by job placement consultancy Challenger, Gray & Christmas.

Employers announced plans to reduce their work forces by 88,736 jobs in August — 14 percent fewer than the 103,312 job cuts announced in July but 12 percent more than the 79,459 recorded in August 2007.

For the summer period of May through August, job cuts totaled 377,325, up from 249,197 in the summer of 2007.

The latest tally pushes the total of announced cuts in 2008 to 667,996, up 29 percent from 515,855 in the first eight months of 2007.

The firm said that at the current pace, job cuts will surpass last year's 12-month total by the middle of October and could exceed 1 million for the first time since 2005.

"Hopes of a late-summer reprieve in layoffs were dashed by heavy downsizing in the automotive and government sectors, where employers announced 17,233 and 12,328 job cuts, respectively," said John Challenger, chief executive of Challenger, Gray & Christmas.

The report defines the summer period as May through August.

The four-month stretch that began this week is typically the heaviest job-cutting period of the year, as employers scramble to meet annual earnings goals and make staffing adjustments based on the coming year's budget, Challenger said. No letup in job cuts is expected.

One bright spot in the latest report was that job cuts in the financial sector fell to their lowest monthly level since July 2007. Financial companies announced 2,182 job cuts in August, down sharply from the average 14,396 job cuts over each of the previous seven months.

The financial sector remains the largest job-cutting industry for the year, with 102,957 announced cuts, ahead of 80,323 by the automotive sector.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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