Layoffs hit their highest level for a first quarter in 10 years as 2019′s job market got off to a shaky start, according to a report Thursday from outplacement firm Challenger, Gary & Christmas.
Total announced cuts hit 190,410, a 10.3 percent increase from the fourth quarter and 35.6 percent jump from the same period a year ago. The level was worst period overall since the third quarter of 2015 and the highest level for a first-quarter since 2009 as the economy was still mired in the financial crisis.
“Companies appear to be streamlining and updating their processes, and workforce reductions
are increasingly becoming a part of these decisions, ” Andrew Challenger, vice president at Challenger, Gray & Christmas, said in a statement. “Consumer behavior and advances in technology are driving many of these cuts.”
The news comes amid conflicting signs for employment.
Nonfarm payrolls growth surged by 311,000 in January but then slumped to just 20,000 the following month. Still, the unemployment rate is just 3.8 percent, near the lowest level in 50 years.
Economists expect Friday’s Labor Department report on payrolls to show growth of 175,000 and the unemployment rate to stay unchanged. But there have been cracks lately that suggest the jobs climate is beginning to turn. For instance, private payrolls grew by just 129,000 in March, an 18-month low, according to a report Wednesday from ADP and Moody’s Analytics.
The Challenger report pointed to worries about an economic slowdown as being a main driver in the layoff intentions.
The auto industry led by sector in March with 8,838 layoffs, followed by energy with 8,149 cuts. Financial firms were next with 4,884, while retail followed with 4,860. Retail has announced 46,061 cuts this year, an 18.5 percent decrease from the first quarter of 2018.
“Several indications, such as the number of companies filing for bankruptcy or closing operations, suggest we’re heading for a downturn. The recent proposal to close the southern border adds to the uncertainty and may contribute to more cuts as companies try to adapt,” Challenger said.