Published May 2, 2024
U.S.-based employers announced 64,789 cuts in April, a 28% decrease from the 90,309 cuts announced one month prior. It is down 3.3% from the 66,995 cuts announced in the same month in 2023, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
So far this year, companies have announced 322,043 job cuts, down 4.6% from the 337,411 announced through April last year.
Challenger, Gray & Christmas, Inc. ©
“The labor market remains tight. But as labor costs continue to rise, companies will be slower to hire, and we expect further cuts will be needed. This low April figure may be the calm before the storm,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
Indeed, the average duration of unemployment from the Bureau of Labor Statistics stood at roughly 5 months in March, or 21.6 weeks. That is compared to 4.4 months, or 19.1 weeks, during the same month last year.
In Challenger’s Index, the average job search time lasted 3.05 months in the first quarter, compared to 2.71 in the same quarter a year ago. The Index comes from a quarterly survey of 3,000 job seekers nationwide.
Which Industries Are Cutting Workers?
Automotive
The Auto sector cut the most jobs in April, with 14,373, primarily on Tesla’s announcement that the car maker would slash 14,000, or 10% of its global workforce. The sector has cut a total of 20,189 cuts this year, up 108% from the 9,709 cuts announced in the same period last year.
Education
Companies in the Education industry, which includes schools and universities, cut the second-most jobs last month with 8,092 for a total of 17,892. That is a 635% increase from the 2,435 cuts announced during the first four months of 2023.
“April is typically the time school districts are hiring and setting budgets for the next fiscal year. Certainly, there are budgetary constraints, as labor costs rise, but school systems also have a retention and recruitment issue,” said Challenger.
Health Care/Products
Health Care/Products companies, including hospitals, cut 5,826 jobs in April for a total of 17,218, a 41% decrease from the 29,184 cuts announced during the same period last year.
Technology
The Technology sector continues to lead all industries in job cut announcements with 47,436, a 58% decrease from the 113,944 job cuts in the Technology sector announced during the same period last year.
Challenger, Gray & Christmas, Inc. ©
Media & News
The Media industry, which includes television, film, streaming, and News, announced 8,091 job cuts so far this year, down 29% from the 11,328 announced in the industry through April 2023.
Challenger, Gray & Christmas, Inc. ©
News, which includes digital, broadcast, and print, and is tracked as a subset of Media, announced 57 layoffs in April for a total of 2,184, up 12% from the 1,995 cuts tracked during the same period last year.
Why Are Companies Cutting?
“Cost-cutting” is the leading cause for job cuts so far this year with 73,767, followed by “restructuring” which accounted for 55,947 job cut plans.
Artificial Intelligence was cited for 800 job cuts in April, the highest total since Challenger first tracked job cuts for this reason in May of 2023, when 3,900 cuts were cut due to this reason. Since then, companies cut 5,430 job cuts due to AI, either because the companies were pivoting to developing it or because it replaced tasks and roles.
Related: AI Will Replace Tasks, But Will It Replace Jobs?
Another 80 job cuts were attributed to Texas Senate Bill 17 (SB-17), which went into effect on January 1, 2024. The bill prohibits public higher education institutions in Texas from engaging in diversity, equity, and inclusion (DEI) initiatives. This includes banning the establishments from having DEI offices or requiring DEI training, unless such training is developed to ensure compliance with state or federal law.
Hiring Plans Lowest Since 2016
U.S. employers announced plans to hire 9,802 workers in April, the lowest total for the month since 9,322 hiring plans were announced in April 2013. For the year, employers have announced plans to hire 46,597 workers, the lowest total in the first four months of the year since 2016, when 38,445 hiring plans were recorded.
