The number of planned job cuts in the U.S. soared to a 29-month high in September, exacerbated by layoffs at Bank of America and cutbacks by the U.S. military, a report said.
Global outplacement firm Challenger, Gray & Christmas Inc. reported that job cuts totaled 115,730 in the month -- the highest such figure since April 2009 – and more than double the 51,114 announced in August.
In April 2009, 132,590 job cuts were unveiled.
By comparison, only 37,151 job cuts were announced in September of last year.
“Heavy reductions planned by the military accounted for a large portion of September job cuts, signaling what may lie ahead as the federal government seeks across-the-board cuts in spending,” Challenger said.
Moreover, Challenger noted that the September 2011 surge raised the number of job cuts announced in the third quarter to 233,258, the highest quarterly number since the third quarter of 2009.
”That figure is up 103 percent from the previous quarter and 105 percent higher than the same quarter a year ago,” the firm stated.
“[Year]-to-date, U.S.-based employers have announced 479,064 planned layoffs in 2011, a 16.5 percent jump from the same point last year, when job cuts totaled 411,272.”
Challenger noted that so far in 2011, about one-third of the layoffs came from the government sector.
“It is, by far, the largest job-cutting sector, with 159,588 announced job cuts to date,” the firm stated.
“This figure includes 54,182 government-sector cuts in September, 50,000 of which are the result of a five-year troop reduction plan announced by the United States Army.”
The second largest job-slashing sector to date is the financial sector, which has announced 54,013 planned layoffs between Jan. 1 and the end of September.
“That is up 177 percent from the 19,474 job cuts recorded over the first three quarters of 2010,” Challenger indicated.
“Of the 54,013 financial job cuts this year, 31,167 occurred in September, with 30,000 resulting from Bank of America’s multi-year workforce reduction plan aimed at saving the struggling bank $5 billion per year.”
John A. Challenger, chief executive officer of Challenger, Gray & Christmas, commented in a statement: “It would be easy to look at the September job-cut figure alongside some of the other less-than-stellar economic news that has been reported lately and draw the conclusion that the economy is indeed headed for a double dip. However, it is important to keep in mind that 80,000 cuts, or nearly 70 percent of last month’s total, came from just two organizations: Bank of America and the United States Army.”
Challenger added: “Neither of these cuts is directly related to recent softness in the economy. The Bank of America cuts are the result of continued fallout from the housing market collapse and restructuring effort to remake the bank into a smaller, more nimble institution. The military cuts are the result of drawing down forces in two wars and cost-cutting efforts in all areas of the federal government.”
However, he further cautioned: “That being said, both could definitely be a sign of more cuts to come. Bank of America is not the only bank still struggling in the wake of the housing collapse. And, the military cutbacks are probably just the tip of the iceberg when it comes to federal spending cuts and layoffs.”