Report: Employer Job Cuts Steady at 39,000 in June

Employers aren't yet hiring workers in large numbers, but the rate of job cuts remains well below last year's pace, according to a new survey released Thursday.

U.S. firms planned to cut 39,358 jobs in June, a slight increase from May's 38,810 announced layoffs, marking the third consecutive month in which announced job cuts totaled fewer than 40,000, according to the latest job-cuts report by employment-services firm Challenger, Gray & Christmas.

Heading into the second half of 2010, the pace of downsizing has slowed significantly from a year ago, Challenger said. The job-cut total for each month this year, including June, was lower than the same month in 2009. June job cuts were 47% lower than the 74,393 announced a year ago.

Overall, employers announced 297,677 job cuts in the first six months of 2010. That's 67% below the 896,675 layoffs during the first half of 2009 and the lowest six-month total since 2000, when the mid-year total was 223,421, the report said.

Challenger said job cutting among employers, which had slowed in the first quarter, ebbed even more during the second quarter, which ended Wednesday. Planned job cuts announced from April through June fell to 16,494, or 36% fewer than the 181,183 anticipated layoffs reported during the January through March period. Further, planned cuts fell 63% during the second quarter compared to the same period a year ago, when employers announced 318,165 layoffs.

"While some may question the sustainability of this recovery, the dramatic decline in planned layoffs over the past six months certainly suggests that the nation's employers are not anticipating a double-dip recession," said Challenger CEO John Challenger.

Industries with the highest number of announced cuts included computer; government/non-profit; retail; and transportation, accounting for half of all layoffs. Employers largely cited business restructuring, cost cutting or closing as cause of the cuts. The report noted that 150 jobs were expected to be cut due to the massive BP (BP) oil spill in the Gulf of Mexico.

Layoffs within the top five job-cutting industries have declined this year, Challenger said, which "bodes well for the job market as we enter the second half of 2010."

West and Southwest states fared worst in the latest survey, with California accounting for 86% of the more than 16,000 planned cuts in the region. The South, with 6,554 cuts, led by Florida and Tennessee, had the fewest, while Midwest recorded 6,823 announced layoffs, most of which were in Illinois. The Northeast reported nearly 9,700 anticipated cuts, the bulk of which were in New York and to a lesser extent Pennsylvania.

So far this this year, New York, California, the District of Columbia, Illinois and New Jersey, lead the nation with a combined 174,365 job cuts, the report said.

Among industries with plans to hire the most workers last month were transportation, industrial goods, energy and computers, Challenger said. In total, employers said they expected hire nearly 12,000 workers last month.

"Looking ahead, most employers are growing more and more confident and this will inevitably lead to increased hiring," Challenger said. Still, he said, job creation remains in its infancy and volatility in the job market should be expected.