Fewer Pink Slips Issued, Survey Shows Planned Cutbacks Dropped 55.2 Percent During January
The number of planned job cuts by major U.S. businesses declined in January from a year earlier, according to a survey released last week, though dismissals rose from the previous month.
Planned cuts fell 55.2 percent last month to 43,595 from 97,379 during January 1996, according to the monthly survey by the employment firm Challenger, Gray and Christmas. However, January’s planned dismissals are 16.6 percent higher than December’s total of 37,403, reflecting weaker-than-expected holiday sales and seasonal job reductions in retailing.
“Many companies are adjusting the size of their payrolls or closing stores to compensate for losses at the cash register,” said John Challenger, executive vice president of the Chicago-based firm.
Struggling McCrory Corp. of New York won bankruptcy court approval last month to close 300 of its 461 variety stores. The Challenger survey estimated the McCrory closings would account for 3,500 dismissals. Another retailer, Petrie Retail Inc., of Seacaucus, N.J., announced in plans to close 116 women’s clothing stores by April to boost profits, and Challenger estimated that would account for 1,000 cuts.
Other industries reporting planned reductions in January included financial services, automotive, aerospace and transportation, the Challenger survey showed.
Still, job growth last year was robust, and on Friday the Labor Department reported that the economy added 271,000 non-farm jobs in January. The unemployment rate, meantime, edged up to 5.4 percent in January from 5.3 percent in December.
Meanwhile, Labor Department figures released last week showed a drop in first-time claims for unemployment benefits to the lowest level in a month.