Retail, financial firms lead January job cuts

U.S. employers announced the most job cuts since September as retail and financial firms laid off workers. 

There were 53,486 job cuts announced in January, the largest monthly layoff total since 115,730 job cuts in September, according to a report released Thursday by global outplacement firm Challenger, Gray & Christmas.

The January total was 28 percent higher than the 41,785 job cuts announced in December and 39 percent higher than January 2011, when employers announced 38,519 planned cuts, the lowest total for the first month of the year on record. 

January is typically the heaviest job-cutting month, averaging 101,084 announced layoffs between 1993 and 2011. October, the next heaviest job-cut month, averaged 82,036 cuts over the same period. 

“This year marks the sixth consecutive year and the 11th out of the last 13 in which January job cuts surpassed the December total,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.

Retailers and financial firms led the surge last month with 12,426 and 7,611 job cuts, respectively. The retail total was the largest since January 2010, when there were 16,737 announced layoffs.  

Retail job losses weren't caused by the shedding of seasonal workers, which typically are not announced or reported as job cuts, the report said. 

Rather, the cuts are related to restructurings, store closings and other cost-cutting measures.

The 7,611 job cuts in the financial sector mark the largest one-month total since September, when 31,167 job cuts were announced, most of which came from a single announcement by Bank of America.

For the second consecutive month, the government sector made relatively few job cuts, announcing just 3,021 layoffs in January, up slightly from 2,183 in December.  

The drop in layoffs is likely a welcomed trend in a sector that averaged 15,255 job cuts per month last year and announced a total of 325,319 job cut in the 24-month period ending in December.

“Of course, it is far too early to say whether we will continue to see low job-cut figures in government," Challenger said. 

"It is highly unlikely, considering that many cities and states continue to struggle with budget deficits," he said.

"And, then there is the federal level of government, which remains under intense pressure to cut costs. As a result, we expect government layoffs to be heavy again this year."