From 24/7 Wall St.: Planned job cuts in the third quarter rose 25% from a year ago. With September jobs cuts up 19% from last year, it represented the fourth month in a row in which job cuts were higher than the same month last year. Despite the current trend, employers are on pace to cut roughly the same number of jobs that were cut last year.
According to data compiled by Challenger, Gray & Christmas, 10 companies alone have announced close to 75,000 job cuts this year, combined. This represents nearly 20% of all the announced cuts in 2013.
In an interview with 24/7 Wall St., Challenger, Gray, & Christmas CEO John Challenger explained, “For every situation, there’s a different reason for a company to cut jobs.” In some cases, it is a matter of simple corporate restructuring. In other cases, companies facing difficult headwinds are forced to shed jobs. Based on data from Challenger, Gray & Christmas, 24/7 Wall St. reviewed the companies cutting the most jobs.
The companies that are cutting the most jobs this year are, not surprisingly, in industries that are eliminating the most positions overall. The financial services sector is leading the way with 48,874 planned layoffs year to date. American Express, J.P. Morgan and Wells Fargo are all among the top 10 for announced job cuts.
Retail was also in the top five industries, with J.C. Penney and Dish Network’s Blockbuster in the top 10. Aerospace and defense was also among the industries with the most planned layoffs. United Technologies and Boeing were among the companies eliminating the most jobs.
Not all businesses have cut jobs due to poor demand for their products. Challenger also noted that companies announce job cuts when jobs are relocated to another part of the country, or even the world. Metlife moved a large number of jobs from the Northeast to a new base in North Carolina. Additionally, the company also scaled back its variable annuities business, while expanding its presence in emerging markets.
Similarly, United Technologies has been restructuring its operations, both this year and last, in order to cut costs and integrate acquisitions, notably the $16 billion purchase of aircraft component maker Goodrich.
Sometimes, technological change drives job cuts. “In these cases, the business model changes in response to new technology that affects the company or the industry, and a particular company adjusts,” Challenger explained. Cisco has had to contend with the emergence of cloud computing, as cheaper services have undercut the company’s traditionally profitable businesses. Similarly, the travel business of American Express has been impacted by the growth in travel websites.
Some businesses have had to cut jobs as part of their efforts to stay afloat. ”A company just isn’t performing well via its competition, or maybe just revenue is down, and they’re just cutting back,” Challenger explained. J.C. Penney’s sales have declined precipitously in recent years, and it has struggled to keep enough cash on hand to run its business. As a result, the company has had to cut more than 15,000 jobs in 2013. Dish has had to slash jobs at Blockbuster as it continues to close unprofitable stores.
Many of the companies announcing the most job cuts are also among the country’s largest employers. This means, in many cases, the layoffs represent only a small proportion of companies’ total workforces. IBM’s 9,4000 job cuts accounted for just over 2% of the company’s total headcount as of this year.
Only a few of the companies cutting the most jobs have lost money. Only one of these companies, J.C. Penney, posted a net loss, while half increased their net income during their past full fiscal year. Also, shareholders in all but two of the 10 companies, J.C. Penney and IBM, have seen the value of their holdings rise so far in 2013.
Challenger Gray & Christmas provided 24/7 Wall St. with all job cut announcements affecting at least 500 positions this year. 24/7 Wall St. combined all planned cuts by company to identify the companies that are cutting the most jobs this year. We only considered publicly traded, American companies, or divisions of publicly traded companies. Job cuts did not need to be entirely within the United States, however. Some cuts announced in 2013 may not be completed this year. Full-time employee totals were from Yahoo! Finance.
These are the 10 companies cutting the most jobs, according to 24/7 Wall St.