WASHINGTON: U.S. employers announced another 115,762 job cuts in August, led by struggling airlines as the COVID-19 pandemic weighs on travel and financial assistance from the government lapses.
Though the layoffs reported by global outplacement firm Challenger, Gray & Christmas on Thursday were 56% down from July, they lifted total job cuts so far this year to a record 1.963 million. The previous all-time annual high was 1.957 million in 2001. Companies announced 160,411 hiring intentions in August.
“The leading sector for job cuts last month was transportation, as airlines begin to make staffing decisions in the wake of decreased travel and uncertain federal intervention,” said Andrew Challenger, senior vice president at Challenger, Gray. “An increasing number of companies that initially had temporary job cuts or furloughs are now making them permanent.”
The report followed news on Wednesday that private employers hired fewer workers than expected in August. The weak data raises the risk of a sharper slowdown in job growth in August.
The Labor Department will publish its closely watched, and broader, monthly employment report on Friday. According to a Reuters survey of economists, nonfarm payrolls likely increased by 1.4 million jobs in August, down from 1.763 million in July.
Government assistance to workers and employers led to a sharp rebound in economic activity, but its expiration in recent weeks has left the recovery from the depths of the coronavirus crisis floundering.
United Airlines said on Wednesday it was preparing to furlough 16,370 workers on Oct. 1. Airlines received $25 billion in government stimulus funds in March meant to cover payrolls and protect jobs through September.
According to Challenger, Gray & Christmas, transportation companies announced 26,545 job cuts in August, bringing the tally this year to 131,571 jobs, a 482% increase compared to the January-August period in 2019.
Another 17,271 layoffs were announced at bars, restaurants, hotels and amusement parks in August. Entertainment and leisure companies have announced 799,051 job cuts this year.
Employers continued to blame poor market conditions, weak demand and cost-cutting for layoffs in August.–Agencies
