According to a report by job-placement firm Challenger, Gray & Christmas, monthly layoffs in the U.S. hit a 15-year high in August, while hiring so far this year is the lowest in 20 years.
Last month, employers announced 75,891 layoffs, a staggering 193% increase from July. data A report from the recruitment service published on Thursday showed that while the difference between August this year and August 2023 (75,151 redundancies) is less pronounced, excluding the 115,762 announced in the first August of the coronavirus lockdown, last month was the highest number of job cuts since 2009.
“The sharp increase in job cuts in August reflects growing economic uncertainty and changing market trends,” said Andrew Challenger, senior vice president at the company. “Companies are facing a range of pressures, from rising operational costs to concerns about a potential economic slowdown, forcing them to make tough decisions about workforce management.”
“Continued pressure has prevented the union from making a decision and the cuts are following a very similar pattern to last year,” Challenger said.
The data showed that the technology industry experienced its “biggest job cuts in 20 months”, with 39,563 layoffs announced last month, bringing the total for the year to 105,426.
One of the reasons Challenger cited is artificial intelligence (AI).
The technology industry is shifting from a focus on growth and innovation to a focus on profitability and efficiency. The adoption of AI and automation is also driving downsizing across various roles and functions at technology companies. However, talent in this field remains in high demand, and many of these professionals will find employment in other fields, both within and outside the technology industry. That said, we are entering a period of slower hiring, so it may take longer to hire than at any point in the past decade.
Other industries that have seen a mass exodus of employees this year include education, entertainment, industrial manufacturing, retail and media/news, with companies still struggling with “post-pandemic demand” and increased automation due to AI, he said.
In terms of hiring, employers announced just 6,101 new hires.
This figure is up by about 2,500 compared to July, but still represents a 23% decrease since August 2023.
“About 80,000 job openings have been announced so far this year, the lowest figure since 2005.” attention CNBC's Jeff Cox.
The media outlet also said Challenger's layoff data “misaligns slightly with government reports, which show that initial claims for unemployment benefits have risen slightly in recent weeks but do not reflect a significant increase.”
“The labor market is softening overall,” Challenger said.
