U.S. layoffs accelerated in late 2008

The holidays did little to slow the pace of downsizing nationwide, as employers announced plans to eliminate another 166,348 jobs from payrolls in December, according to job outplacement consultants Challenger, Gray & Christmas.

That is largest December job-cut total on record, according to today’s year-end job-cut report from Chicago-based Challenger Gray, which began tracking layoffs in 1993.

December job cuts were 8.4 percent lower than the seven-year high of 181,671 in November.  However, last month’s total was nearly four times larger (275 percent) than a year ago, when employers announced 44,416 job cuts, the lowest December total since 1999.

Overall, employers announced 1,223,993 job cuts in 2008, the largest annual total since 2003, which saw 1,236,426 job cuts.  The year-end total was 59 percent higher than the 768,264 layoffs announced in 2007. 

The 2008 job cuts were dominated by the financial sector — Connecticut’s leading source of jobs — which announced plans to shed 260,110 workers, Challenger Gray said.  That is the third largest annual industry total on record behind the 317,777 job cuts and 268,851 job cuts announced by the telecommunications sector in 2001 and 2002, respectively.

Connecticut unemployment stood at 6.6 percent, as of November. The U.S. jobless rate is 6.7 percent.

The automotive industry was the second-biggest downsizing industry of the year, with 127,281 announced cuts. That was 61 percent more than in 2007 but 20 percent lower than the recent peak of 158,766 reached in 2006, the report said. 

Annual job cuts also increased significantly among employers in the transportation, retail and government sectors, which saw planned layoffs increase by an average of 154 percent.

The pace of downsizing increased significantly in the second half of the year, rising 57 percent from 475,948 job cuts in the opening six months of 2007 to 748,045 job cuts since July.

Employers announced 460,903 job cuts in the fourth quarter alone.  That is the largest one-quarter total since 478,905 job cuts were announced in the first three months of 2002.