Challenger: Fewer March Layoffs Didn't Produce More Hiring

April 1, 2003 ( - Planned job cuts plummeted 38% in March to their lowest level in six months, but that doesn't mean it is time to break out the bubbly.

In its regular monthly report, outplacement firm Challenger, Gray & Christmas said US employers announced plans to put 85,396 people on the street in March, down from February’s level of 138,177 ( See Job Cuts At Highest Level Since November, Firm Says ).  However, just because companies weren’t sacking as many employees doesn’t also mean they’re starting to hire once again. “March marked the culmination of the war buildup, and it clearly caused American businesses to put major decisions and actions on hold,” the Challenger report said.

Planned layoffs also declined for the quarter ending March 31 with 355,795 announced job cuts. That represents a 17% decline from the fourth quarter of 2002 (426,435) and a 26% drop from the first quarter a year ago (478,905).

The Challenger report pointed out that d espite the reductions, average monthly job cuts remain above the 100,000-mark. So far in 2003, job cuts are averaging 118,598 per month, which is only 3% below the pace in 2002, when the monthly average was 122,235.  The government sector, which was one of the bright spots in terms of job creation last year, is the top job-cutting sector in 2003, with 61,658 firing announcements.

The retail sector, as a result of moderating consumer spending, ranked second among job cutters through the first quarter of 2003 with 52,463 announced cuts.  Transportation, the biggest job-cutting industry in March with 19,397 job reductions, ranks third in job cuts for the year (31,114).