Chicago, IL, January 5, 2006--Job cuts by U.S. corporations increased 3.1% in 2005 to 1.07 million, the first annual increase since 2001, outplacement firm Challenger Gray & Christmas said Thursday. It was the fifth year in a row that job cuts exceeded 1 million
Planned layoffs increased 8.6% to 107,822 in December from 99,279 in November, the most since June. Layoffs rose 17.5% in the fourth quarter to 288,402, the most in a year, Challenger said. The government and nonprofit sector announced the most cuts in 2005, with layoffs rising 48% to 136,640. The auto sector announced 110,016 job cuts, up 43% from 2004
"Unfortunately for workers in these sectors, there does not appear to be any relief in the near term," said John Challenger, chief executive officer of the outplacement firm.
"The biggest problem in the coming year and for years to come for government employers--as well as for those in the automotive, transportation, industrial goods, education, and health-care sectors--is how to pay for rising legacy costs," Challenger said. "Overburdened, underfunded and mismanaged pension plans will have a significant impact on earnings and force employers to cut costs. Some will even be pushed into bankruptcy."
The Challenger data cover only a small portion of job losses in the United States each month. Layoffs at small companies are not included, for instance. In the most recent government data, 1.43 million layoffs and discharges were reported in October. The layoffs can be accomplished immediately or over time. Some jobs are cut through voluntary means, such as quitting or retiring
