Employers announced 92,917 job reductions in December, down from November’s 157,508 and much lower than September 11-impacted December 2001 of 161,584; marking the ninth time in 2002 that jobs cuts were lower than the same year-ago month. For the year, t he 2002 total was 25% lower than the record 1,956,876 job-cut announcements tracked by Challenger in 2001.
Despite the December decline, the fourth quarter was recorded as the second heaviest job-cutting period of 2002, with 426,435 announced cuts; 11% lower than the quarter began in January 2002. Additionally, the fourth quarter figure was 58% higher than the third quarter (269,090), but 27% lower than the fourth quarter of 2001 when employers announced 585,188 job cuts.
Overall, 2002 saw 1,466,823 job cuts announced, the second largest annual total on record. According John Challenger, chief executive officer, t he drop below 100,000 in December is not much to celebrate nor is it an indication of a downward trend. Pointing toward last year at this time, declines in November and December gave way to a more than 86,000 job cut surge in January.
Heavy downsizing in the high-tech sector accounted for 15% of the planned December job cuts and 468,161 or 32% of the cuts year to date. In the release, Challenger expected t elecommunications and the other high-tech industries would probably continue having troubles in 2003, which does not bode well for the workers who have managed to keep their jobs. The biggest problem the sector is facing is the lack of new technology spending on the part of businesses, citing survey results of members of the Business Roundtable, comprised of 150 chief executive officers, tech spending and capital spending are not expected to rebound in the new year, as 80% said they would hold the line or reduce capital spending in 2003.
Challenger said this would most certainly stunt job creation. The same survey found that 60% of the CEOs expect their companies to eliminate jobs in 2003, so it is far to early to forecast a turnaround in the job market.