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Job cuts hit 9-month low in March

Layoffs around the country fell in March to their lowest level in 9 months, but companies remain reluctant to add new workers, according to the Challenger report released Tuesday.
/ Source: Reuters

Layoffs in the United States fell in March to the lowest level in nine months, although companies remain reluctant to hire new people, according to a report released on Tuesday.

The outplacement firm Challenger, Gray & Christmas Inc., said planned job cuts decreased to 68,034 in March compared with 77,250 in February. The group's 12-month moving average, which smoothes out month-to-month volatility, fell to 95,289 in March from 96,736 in February.

"The heavy job cutting we have seen over the past three years appears to be trending down," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. "However, the job market seems to be in a state of limbo, where companies are eager to hold on to the people they have, but many are reluctant to create any new jobs."

One reason given for the reluctance to hire was most companies would rather keep older and more experienced workers rather than invest in the training of new ones.

Noting that the economy remains at a vulnerable point, Challenger said: "Employers know they are far better off with a seasoned, senior staff versus the cost of acquiring and training replacements in a period when the customer is king."

The belt-tightening on Wall Street that followed the recent recession continued last month, as the financial services industry led all others with 16,120 job cuts. The telecommunications industry was a distant second, with 9,823 layoffs.

The report said total planned layoffs in the first quarter of 2004 fell to 262,840 compared with the fourth quarter of last year when 364,346 job cuts were announced. Planned layoffs in the first-quarter layoffs were 26 percent lower than during the first quarter of last year.

The Challenger report arrives before the dust has settled on Friday's surprisingly positive employment report for March, which showed the economy created 308,000 non-agricultural jobs, reinforcing beliefs that the job market is firming.