Planned layoffs at U.S. firms eased in December from the previous month’s seven-year high but they were up an astounding 275 percent annually as the year-old recession cut a huge swath of destruction through the job market.
The economic slump, which is likely to be the longest since the Great Depression of the 1930s, also produced the worst year of layoffs since 2003, outplacement company Challenger, Gray & Christmas said on Wednesday in its monthly report on U.S. job cuts.
The report said heavy job-cutting could continue through at least the first half of 2009, and the outlook afterward hinges on President-elect Barack Obama’s plans to stimulate the economy through increased government spending.
“The economy could begin to mount a comeback in the second half of the year, if the new administration can achieve quick passage of its proposed economic and job-growth stimulus package,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.
“The plan to rebuild the nation’s crumbling infrastructure will benefit not only laborers on the front lines, but it will push up through the economy, creating jobs for manufacturing workers, engineers, architects, technology specialists, etc.”
Job cuts announced in December totaled 166,348, down 8.4 percent from November’s 181,671, Challenger, Gray & Christmas said. Despite the monthly decline, layoffs were up from just 44,416 in the year-ago period.
Overall, employers announced 1,223,993 job cuts in 2008, the largest annual total since 2003, when there were 1,236,426 job cuts.
The year-end total was up 59 percent from the 768,264 layoffs announced in 2007. It was the largest total for any December since Challenger started tracking layoffs in 1993.
Employers announced 460,903 job cuts in the fourth quarter alone, producing the largest one-quarter total since 478,905 job cuts were announced in the first three months of 2002.
The financial sector was at the epicenter of the economic turmoil in 2008 and, not surprisingly, job cuts.
The financial sector announced plans to shed 260,110 workers, the third largest annual industry total on record behind the 317,777 job cuts and 268,851 job cuts announced by the telecommunications sector in 2001 and 2002, respectively.
The automotive industry was the second-biggest downsizing industry of the year, with 127,281 announced cuts followed by transportation at 82,859.
The financial sector also topped the December layoffs with 39,604.
The Challenger data comes ahead of the government’s closely watched non-farm payrolls report on Friday, which is expected to show 500,000 jobs were lost in December, according to the median of forecasts in a Reuters poll.