More than 75 employers take resumes and talk to potential new employees at a career fair in Lake Forest, California on Wednesday, February 21, 2024.
Paul Bercebach | Media News Group | Orange County Register | Getty Images
Layoff announcements in February reached their highest level for the month since the global financial crisis, according to Challenger, Gray & Christmas.
The total of 84,638 planned cuts showed an increase of 3% from January and 9% from the same month last year, with technology and finance companies leading the way.
From a historical perspective, this was the worst February since 2009, which saw 186,350 ads, as it appeared the worst of the financial crisis was about to end. Financial markets bottomed out the following month, setting the stage for the longest economic expansion on record, lasting until the Covid pandemic in March 2020.
Over the course of the year, companies listed 166,945 reductions, a decrease of 7.6% from last year.
“As we move into the beginning of 2024, we are seeing a continuing wave of layoffs,” said Andrew Challenger, the company's labor and workplace expert. “Companies are aggressively cutting costs and embracing technological innovations, actions that are dramatically reshaping staffing needs.”
With a series of high-profile layoffs, technology is leading the way this year in cuts with 28,218, although that number is down 55% from the same period last year. Layoff announcements at financial companies are up 56% compared to the first two months of 2023.
Other industries planning deep cuts include industrial goods manufacturing (up 1,754% from last year), energy (up 1,059%), and education (up 944%).
However, the layoff numbers do not feed into weekly unemployment claims, suggesting that unemployment is short-lived and that workers are able to find new jobs. Initial claims for unemployment insurance totaled 217,000 in the latest week, unchanged from the prior period and right in line with Wall Street estimates.
Challenger experts say companies often cite restructuring plans as the main reason for workforce reductions. AI was cited in just 383 downgrades, although overall “technology updates” were the root cause of more than 15,000 downgrades, or nearly all the years combined since 2007.
“In fact, companies are also applying robotics and automation in addition to AI,” Challenger reported. “It is worth noting that in the past year alone, AI was directly cited in 4,247 job cuts, indicating a growing impact on companies’ workforces.”
