On Wednesday, February 21, 2024, more than 75 employers were collecting resumes and talking to potential new hires at a job fair in Lake Forest, California.
Paolo Bersebach | Medianews Group | Orange County Register | Getty Images
Layoff announcements in February reached the highest level for a month since the start of the global financial crisis, according to outplacement firm Challenger, Gray & Christmas.
The total of 84,638 planned cuts showed an increase of 3% compared to January and 9% compared to the same month a year ago, with technology and financial companies at the forefront.
From a historical perspective, this was the worst February since 2009, which saw 186,350 announcements as the worst of the financial crisis appeared to be coming to an end. Financial markets bottomed the following month, paving the way for the longest economic expansion on record, which lasted until the Covid pandemic in March 2020.
For the year, companies listed 166,945 cuts, down 7.6% from a year ago.
“As we move into early 2024, we are seeing a persistent wave of layoffs,” said Andrew Challenger, the firm’s labor and workplace expert. “Companies are dramatically reducing costs and embracing technological innovations, actions that are significantly reshaping staffing needs.”
With a series of waves of high-profile layoffs, the tech sector leads the way in cuts this year with 28,218, though that number is down 55% from the same period a year ago. Layoff announcements at financial firms increased 56% compared to the first two months of 2023.
Other sectors planning significant cuts include industrial goods manufacturing (up 1,754% from a year ago), energy (up 1,059%) and education (up 944%).
The layoff data, however, does not translate into weekly jobless claims, suggesting that unemployment is short-lived and that workers are able to find new positions. Initial claims for unemployment insurance totaled 217,000 in the most recent week, unchanged from the previous period and exactly in line with Wall Street estimates.
Challenger experts say companies often cite restructuring plans as the main reason for workforce reductions. AI was cited for just 383 cuts, even though “technology upgrades” in general were behind more than 15,000 reductions, or nearly as many years combined since 2007.
“Indeed, companies are also implementing robotics and automation in addition to AI. It’s worth noting that AI was directly cited in 4,247 job reductions last year alone, suggesting a growing impact on companies’ workforces,” Challenger reported.