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July 06, 2001
Job Cuts Climbed in June
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The report was issued Thursday, the same day the U.S. Labor Department reported that new jobless claims rose last week.
Specifically, new claims for state unemployment benefits rose to 399,000 last week from a revised 392,000 the prior week, the Labor Department reported.
But the four-week moving average of new claims, considered a better gauge of jobless trends, fell to 407,500 from the previous week's revised number of 417,500.
Challenger, Gray said the announced job cuts for June increased 56 percent from May (80,140) and marked the sixth time in seven months that job cuts exceeded 100,000.
Last month's numbers by 624 percent over those for June 2000, when job cuts totaled just 17,241, a three-year record low.
Job cuts in the first half of 2001 total 777,362, nearly three and one-half times more than the 223,421 announced between January and June, 2000. The 2001 six-month total is in fact 27 percent higher than the year-end figure for 2000 (613,960) and 15 percent higher than the 677,795 job cuts announced in 1998, which was the biggest job-cut year of the last decade.
Job-cut announcements fell slightly in the second quarter, declining nine percent from 406,806 in the first quarter to 370,556 in the quarter ending June 30. But the second quarter was 354 percent higher than the same quarter a year ago when job cuts totaled 81,568.
The telecommunications industry, which has led all sectors in job cuts since April, added another 27,446 in June, bringing its six-month total to 130,442. That is 49 percent more than the second ranked automotive industry, which has announced 87,613 job cuts this year.
The other industries making up the top five are: computers, at 74,723; industrial goods, 59,496; and electronics, 59,181.
"The good news for displaced workers as well as for the economy is that the jobs that are being affected the most by downsizing are still in demand. This is why the unemployment rate has not increased at nearly the same rate as job cuts," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
"When you read about unemployed Silicon Valley technology workers living in San Francisco homeless shelters, it is important to understand that these individuals are the exceptions. Most tech workers can find ample opportunities outside of the Bay Area, probably in an area where the cost of living is much lower too."