Employers took a large ax to their payrolls in January, the government said Wednesday, and the cuts are likely to get worse over the next few months.
The Labor Department reported that mass layoffs, or job cuts of 50 or more by a single employer, increased to 2,227 in January, up almost 50% from the same month last year. More than 235,000 workers were fired in last month's cuts.
January was a bad month for the labor market. Companies from a wide range of sectors announced tens of thousands of layoffs, including Home Depot, Boeing, Pfizer and Caterpillar.
Not all of those cuts were reflected in the government's mass layoffs report, which counts actual firings as reported by laid-off workers seeking unemployment benefits. Many of the layoffs announced in January will take place over time, meaning that the department's mass layoff figures will likely keep increasing.
The pain continued Wednesday. The NFL said commissioner Roger Goodell has taken a 20% pay cut and the league dropped 169 jobs through buyouts, layoffs and other reductions. Spartanburg, S.C.-based textile maker Milliken said it would cut 650 jobs at facilities worldwide and jeweler Zale said it will close 115 stores and eliminate 245 positions.
On Monday, troubled flash memory maker Spansion said it will lay off about 3,000 employees and computer chipmaker Micron Technology announced it will slash as many as 2,000 workers by the end of August.
In a bit of positive news for the job market, consulting firm Watson Wyatt said Wednesday that the number of large employers planning layoffs has dropped since December, according to a survey it conducted of 245 companies last week.
The survey found that the proportion of corporations expecting to cut jobs has dropped to 13% from 23%. But more companies are considering other cost savings, such as increasing health care premiums, eliminating employee benefits like tuition reimbursement, and reducing matching payments for 401(k)-style retirement plans.
The number of layoffs last month actually declined slightly from December on a seasonally adjusted basis, the Labor Department said. But the figures were uglier without the seasonal adjustment: mass layoffs jumped to 3,806, from 3,377 in December and 1,647 in January 2008.
The government seasonally adjusts many economic indicators to smooth out fluctuations resulting from weather changes, holidays and other predictable factors.
Eleven industries — including mining, manufacturing, transportation and financial services — in January reported the highest levels of job losses on government records dating back to 1996.
The department said earlier this month that employers cut nearly 600,000 jobs in January, the biggest loss since 1974. That sent the unemployment rate to 7.6%, the highest in 16 years. Since the recession began in December 2007, companies have cut a net total of nearly 3.6 million jobs.
Mass layoffs rose sharply last year to more than 21,000, from about 15,000 in 2007, the department said in January. More than 2.1 million workers lost their jobs last year due to those reductions.