After February had the lowest total of announced job cuts since July 2006, employers announced plans to reduce payrolls by 67,611 jobs in March, a 61 percent increase from February, according to outplacement consultancy Challenger, Gray & Christmas Inc.

“Most industries have seen sharp declines in the number of layoffs this year, compared to the beginning of last year,” said John A. Challenger, CEO of Challenger, Gray & Christmas, in a press release. “The first quarter of 2009 really marked the peak of downsizing for this recession.”

Despite the increase, and a 59 percent increase in January from December, the overall pace of downsizing is still well below last year’s record levels. March’s total, for example, was down 55 percent from the same month one year ago, and the first-quarter total of 181,183 announced layoffs in 2010 is 69 percent below the 578,510 layoffs announced in the same quarter last year. More layoffs were announced in January 2009 – 241,749 – than during the entire first quarter of 2010.

Nearly 75 percent of all of March’s planned layoffs were to be reductions to government payrolls. The U.S. Postal Service plans to reduce its work force by 30,000 this year, and about 20,000 job cuts were from state and local agencies including many school districts.

“Unfortunately, many people are still jobless and many businesses still shuttered,” Challenger said. “This combination is having a significant negative impact on state and local tax revenues and, in turn, leading to continued downsizing in this sector.”

Challenger said that although downsizing has slowed as compared with 2009 rates, his company has yet to see a turnaround in hiring, as employers remain wary of the economy. He said it could take at least five years for the unemployment rate to return to pre-recession levels.