Drop in oil prices led to rise in job cut announcements last month

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Job cut announcements surged to their highest level in nearly two years in January, as falling oil prices prompted cost-cutting efforts in energy and related industries, ouplacement consulting firm Challenger Gray & Christmas Inc. said today.

 

U.S.-based employers announced plans to shed 53,041 jobs from their payrolls to start 2015, with 40 percent of those directly related to oil prices, according to a release.

 

The January total was up 63 percent from the 32,640 planned layoffs announced in December, Challenger Gray & Christmas said.

 

Last month’s figure was 18 percent higher than in the same month a year ago, when employers announced 45,107 job cuts. The January figures added up to the highest monthly total since February 2013, when 55,356 cuts were announced, and the highest January total since 2012, when employers announced 53,486 job cuts.

 

Of the 53,041 job cuts announced in January, 21,322 were directly attributed to the recent decline in oil prices. Most of these cuts occurred in the energy industry, where employers announced a total of 20,193 layoffs (19,722 of which were directly attributed to oil prices). The January total is 42 percent higher than the 14,262 job cuts announced by the energy industry in all of 2014.

 

Falling oil prices also contributed to job cuts in the industrial goods manufacturing sector, where companies supplying products and materials to oil drillers were forced to shutter operations. These firms announced 4,859 job cuts in January, of which 1,600, or 33 percent, were due to oil prices.

 

The retail sector posted the second largest job cut total in January, behind energy, according to the report.