by Will Kessler
Layoffs at U.S. companies surged for another month as businesses adjusted to current market conditions, despite huge reported job gains, according to outplacement firm Challenger, Gray & Christmas, Inc.
Job cuts increased to 84,638 in February, 3% higher than in January when layoffs also soared, and 9% higher than February last year, which had 77,770 cuts, according to the report. The layoffs are in spite of strong reported job growth, with the U.S. adding 353,000 nonfarm payroll jobs in January, far higher than expectations of 180,000.
“As we navigate the start of 2024, we’re witnessing a persistent wave of layoffs. Businesses are aggressively slashing costs and embracing technological innovations, actions that are significantly reshaping staffing needs,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, Inc., said in the report.
While the headline figure for Challenger job cuts was up only 8.8% y/y, the small increase was mostly due to base effects: Feb '23 had the most announced layoffs (~78k) for the month of Feb since 2009.
For context, the Feb average for announced layoffs was ~50k from 2017-2019.… pic.twitter.com/O9K3vz3XWW
— Parker Ross (@Econ_Parker) March 7, 2024
Of the announced job cuts, 37,659 were for restructuring purposes, while 26,272 were due to closures at plants or locations, according to the report. Companies said that 20,890 job losses were for the purpose of cost-cutting, and 19,580 cuts were the result of economic and market conditions.
The cuts in February followed a huge spike in January, up 136% month-to-month, with 82,307 positions cut. The number of layoffs in February 2024 was the highest in the month since 2009, when the country was in the midst of the Great Recession, according to the report.
High inflation has continued to plague both consumers and businesses, with prices rising 3.1% year-over-year in February, bucking expectations of 2.9%, and sending the Dow Jones Industrial Average to its worst day since March 2023 as investors responded to the news. In response to high inflation, the Federal Reserve has placed its federal funds rate in a range of 5.25% and 5.50%, placing pressure on interest rates across the economy and tightening credit conditions.
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Will Kessler is a reporter at Daily Caller News Foundation.
