March 2021 Job Cuts Trend Lower

from Challenger Gray and Christmas

Job cuts announced by U.S.-based employers fell 86% in March to 30,603 from the 222,288 job cuts announced in the same month last year, when the fallout from the COVID-19 lockdowns began to impact businesses across the country.

March's total is 11% lower than the 34,531 cuts announced in February. It is the lowest monthly total since July 2018 when 27,122 cuts were recorded. Through the first quarter, 144,686 job cuts have been announced, 58% lower than the 346,683 announced in the first quarter of 2020.

"We have now marked one year since the first wave of layoffs occurred due to the pandemic and subsequent lockdowns. It appears we have entered a recovery phase where job eliminations are slowing and companies are able to predict and assess where growth will occur," said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

The first-quarter total is 35% lower than the previous quarter when 222,493 job cuts were planned. It is the lowest first-quarter total since 2018 when 140,379 cuts were announced, and the lowest quarterly total since Q4 2019, when 127,687 cuts were announced.

Hiring plans are also down this year from the first quarter of last year. Through March 2021, employers have announced plans to add 316,233 jobs, down 66% from the 936,041 added in the first quarter of 2020, 824,610 of which were announced in March.

"While companies were cutting the first wave of positions due to the pandemic, grocers, delivery apps, big-box retailers, and warehouses were adding hundreds of thousands of jobs to keep up with the demand of online shopping," said Challenger.

Indeed, the hiring plans in March 2020 were the second-highest for monthly hiring announcements, surpassed only by September of that year, when hiring announcements for the month hit 929,860.

Through March of this year, job cuts were led by companies in the Aerospace/Defense industry, which has announced 31,073 cuts. This is 338% higher than the 7,090 cuts announced through the same period last year. Telecommunications follows with 24,157 cuts, up 112% from the 11,409 cuts announced last year, as companies in this sector pivot to new technologies.

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