Report: US Job Cuts Reach 14-Year High

Job cuts by U.S. businesses spiked in February, hitting their highest level since 2009.

Employers based in the U.S. announced 77,000 cuts in February, down 24% from the 102,943 positions eliminated in January, the employment service Challenger, Gray & Christmas (CGG) said in a report released Thursday (March 9).

However, February’s figure was 410% higher than the numbers from 2022, as employers look to cut costs amid rising interest rates.

“Certainly, employers are paying attention to rate increase plans from the Fed,” said Andrew Challenger, CGG’s senior vice president, in the report. “Many have been planning for a downturn for months, cutting costs elsewhere. If things continue to cool, layoffs are typically the last piece in company cost-cutting strategies.”

The report noted that February’s total was the highest for that month since 2009, when 186,350 jobs were slashed. So far this year, employers announced 180,713 job cuts, up 427% from the first two months of 2022. Again, these are numbers not seen since 2009, when a total of 428,099 layoffs were announced in January and February, CGG said.

“Right now, the overwhelming bulk of cuts are occurring in technology,” Challenger said. “Retail and financial are also cutting right now, as consumer spending matches economic conditions. In February, job cuts occurred in all 30 industries Challenger tracks.”

The cost-conscious consumer is a popular figure these days, showing up in the earnings reports of a host of different retailers.

Research by PYMNTS shows that close to 70% of retail consumers anticipate significant price increases over the next 12 months, and nearly half are willing to say goodbye to their favorite brands for less expensive competitors.

And according to PYMNTS’ Consumer Inflation Sentiment study, “The False Appeal of Deal-Chasing Consumers,” 50% of consumers said finding better deals has become a much more important factor, if not the deciding factor, in determining where they shop.

CGG’s findings came one day after a report by the ADP Research Institute that showed U.S. private employers adding 242,000 jobs in February, with the largest gains coming from the hospitality and finance sectors.

Those industries saw respective growth of 83,000 and 62,000 jobs, while annual pay rose 7.2% year over year, the slowest gain in 12 months.

“There is a tradeoff in the labor market right now,” APD Chief Economist Nela Richardson said in a news release. “We’re seeing robust hiring, which is good for the economy and workers, but pay growth is still quite elevated. The modest slowdown in pay increases, on its own, is unlikely to drive down inflation rapidly in the near term.”