Planned Job Cuts Spike 59% in July
U.S. employers announced 59% more job cuts in July 2011 than a year earlier, with planned firings last month totaling 66,414, the largest number of jobs cuts in the last 16 months. Planned cuts were led by pharmaceutical companies, including Merck & Co. (NYSE:MRK), which plans to eliminate as many as 13,000 jobs.
Reports of increasing job cuts come amid reports that the manufacturing industry slowed to a snail’s pace in July and consumer spending declined in June for the first time in nearly two years. July is the third consecutive month to bring an increase in job-cut announcements, which, when combined with other negative economic data released this week, paints a dismal picture of the state of economic recovery.
Planned hirings also contracted in July, down from 15,498 in June to 10,706 in July. Still, total payrolls are projected to have risen by 85,000 workers in July after June issued an increase of only 18,000, the smallest in nine months, though the official Labor Department report isn’t due out until Friday. Economists expect that the unemployment rate will remain at 9.2% for July.
Job-cut announcements rose 59% year-over-year in July and rose 60% over June. Here’s a breakdown of their distribution between industries and regions:
- The pharmaceutical industry announced 13,493 job cuts in July.
- The New Jersey-based Merck plans to eliminate 12,000 to 13,000 jobs by 2015.
- California-based Cisco Systems (NASDAQ:CSCO) plans to eliminate about 6,500 jobs.
- Goldman Sachs (NYSE:GS) announced that it will cut about 1,000 jobs.
- New Jersey led all states with 13,330 announced job cuts.
- Michigan had the second most job-cut announcements of any state, reporting 10,923.