Layoffs Up in May

Chicago, IL, June 6, 2007--Planned U.S. layoffs edged up by 0.6 percent in May, led by downsizing in the computer industry as businesses spent less on new technology, an independent report showed on Wednesday.

Announced layoffs totaled 71,115 in May, up from 70,672 in April, according to Challenger, Gray & Christmas Inc., an employment consulting firm. May's job cuts were up 32 percent from a year earlier, when they totaled 53,716.

Firms in the computer sector announced the elimination of 13,631 jobs in May, nearly double the 7,161 announced by the automotive industry, which ranked second in announced layoffs, Challenger said.

"Heavy job cutting in the computer industry reflects a slowdown in business spending on new technology," John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. "We may continue to see heavy cuts in the months ahead with spending expected to remain soft in the near future."

Year to date, announced job cuts remain below last year's level, though the gap is closing. A total 337,773 job cuts have been announced this year, about 8.5 percent fewer than the 369,282 announced in the same period of 2006.

The financial sector continues to lead job cuts for the year after announcing an additional 4,804 layoffs in May. Weakness in the housing market and the collapse of the subprime lending market have contributed to 22 percent of the 55,025 job cuts announced by financial firms since January, Challenger said.

"We have also seen increases in job cutting among pharmaceutical, health care and media firms," said Challenger. "However, the trends do not suggest that the economy or job market is headed for a meltdown.”