Layoff announcements surged to their highest February level since the global financial crisis, as reported by outplacement firm Challenger, Gray & Christmas.
The total of 84,638 planned cuts represented a 3% increase from January and a 9% rise from the same period last year, with technology and finance sectors bearing the brunt.
In historical context, this marks the bleakest February since 2009, which recorded 186,350 announcements as the financial crisis waned. Based on the report, markets hit rock bottom the following month, initiating the longest economic expansion on record, ending with the onset of the COVID-19 pandemic in March 2020.
Yearly figures indicate 166,945 cuts, down 7.6% from the previous year.
“As we navigate the start of 2024, we’re witnessing a persistent wave of layoffs,” noted Andrew Challenger, the firm’s labor and workplace expert. “Businesses are aggressively slashing costs and embracing technological innovations, actions that are significantly reshaping staffing needs.”
Tech leads the year’s cuts with 28,218, down 55% from last year. Financial firms saw a 56% increase in layoff announcements compared to the first two months of 2023.
Other sectors planning substantial cuts include industrial goods manufacturing (up 1,754% from last year), energy (up 1,059%), and education (up 944%).
Despite the surge in layoffs, weekly jobless claims remain stable, indicating brief unemployment spells and successful job transitions. Initial filings for unemployment insurance stood at 217,000 in the latest week, matching Wall Street estimates.
Experts point out that companies frequently cite restructuring as the primary reason for workforce reductions. While only 383 cuts were attributed to artificial intelligence (AI), over 15,000 reductions were linked to technological updates, nearly matching the total for all years since 2007.
“In truth, companies are also implementing robotics and automation in addition to AI. It’s worth noting that last year alone, AI was directly cited in 4,247 job reductions, suggesting a growing impact on companies’ workforces,” reported Challenger.
