Companies announced nearly 90,000 layoffs in March, a sharp step up from the previous month and a giant acceleration from a year ago, outplacement firm Challenger, Gray & Christmas reported Thursday.
Planned layoffs totaled 89,703 for the period, an increase of 15% from February. Year to date, job cuts have soared to 270,416, an increase of 396% from the same period a year ago.
The damage was especially bad in tech, which has announced 102,391 cuts so far in 2023. That’s a staggering increase of 38,487% from a year ago and good for 38% of all staff reductions. Tech already has cut 5% more than for all of 2022, according to the report, and is on pace to eclipse 2001, the worst year ever amid the dot-com bust.
“We know companies are approaching 2023 with caution, though the economy is still creating jobs,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas. “With rate hikes continuing and companies’ reigning in costs, the large-scale layoffs we are seeing will likely continue.”
In other jobs news Thursday, weekly jobless claims totaled 228,000 for the week ended April 1, above the 200,000 Dow Jones estimate, the Labor Department reported. Continuing claims nudged higher to 1.823 million, the highest since December 2021.
Benchmark revisions from the department indicate that claims have been above 200,000 for virtually the entire period going back to late October 2022.
Financial companies have announced the second-highest rate of job cuts this year, with the 30,635 layoffs representing a 419% increase from the first quarter in 2022. Health care and retail are the next highest.
At the same time, planned hiring waned in March, totaling just 9,044, or the worst for the month since 2015. On a year-to-date basis, planned additions are at the lowest quarterly total since 2016.
The main reason cited for job cuts has been market and economic conditions, with cost-cutting the next most often mentioned factor.
The Challenger report comes a day ahead of the Labor Department’s nonfarm payrolls count. Economists surveyed by Dow Jones expect job growth of 238,000 for March, which would be the smallest increase since January 2020.
Along with the high level of layoffs, job openings have begun to fall.
Available positions in February declined below 10 million for the first time since May 2021, indicating at least some loosening in the employment market, according to Labor Department data released Tuesday. The pace of hiring edged lower by 164,000, though layoffs and discharges were down by 215,000.
In all, there were still nearly 1.7 job openings per available workers.
The Federal Reserve has been targeting what had been an ultra-tight labor market as it battles inflation still running near 40-year highs. The Fed has increased its benchmark borrowing rate by 4.75 percentage points over the past year or so as it seeks to soften the demand that has propelled rising prices.
Markets currently are expecting that the Fed is done raising rates and is likely to start cutting later this year, according to the CME Group’s FedWatch tool, which tracks pricing in the futures market.