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Companies’ layoff plans jumped in September

Planned layoffs at U.S. companies rose 7.2 percent from a month earlier in September but jumped 33 percent compared with the same month a year ago, according to a report.
/ Source: Reuters

Planned layoffs at U.S. companies rose 7.2 percent from a month earlier in September but jumped 33 percent compared with the same month a year ago, according to a report on Wednesday that cast further clouds over the state of the U.S. labor market.

Employers announced plans to cut 95,094 jobs in September, up from 88,736 in August and 71,739 in September of last year, employment consulting firm Challenger, Gray & Christmas Inc said.

The September job cuts brought the third-quarter layoffs total to 287,142, the highest quarter of cuts since the fourth quarter of 2005, the report said.

This was a 4.3 percent rise from 275,292 in the second quarter and a 48 percent jump from the 194,095 job cuts announced in the third quarter of 2007, it added.

All things considered, the beleaguered financial sector did surprisingly little damage to the job market in September, though it may take months for the full effects of the latest credit market crisis to be felt.

The financial sector announced 8,244 job cuts during the month, ranking it fourth among the industries tracked by Challenger.

However, the financial sector still ranks highest for job cuts in the year to date at 111,201. The sector has been hit hard by the worst housing slump since the Great Depression and spiraling credit turmoil.

“It may take several weeks or months for the fallout from September’s Wall Street turmoil to hit the employment numbers,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, was quoted as saying in the report.

The computer industry ranked highest in September with 25,715 job cuts announced, followed by the automotive sector at 14,595 and apparel at 8,350.

The data suggested the effects of the credit crisis were spreading far and wide through the world economy, and washing back up on U.S. shores.

“Global demand is keeping tech firms busy, but there are increasing signs that the global economy is starting to feel the impact of our banking crisis,” the report said.

“As a result, we could see more tech-sector job cuts by the end of the year.”

The Challenger data comes ahead of the government’s comprehensive labor market report on Friday, which is expected to show the U.S. economy as a whole shed jobs for a ninth consecutive month in September.