Dive Brief:
- After a meaningful spike in retail job cuts in December, the industry saw 6,419 job cuts in January. That’s up 96% month over month and up 20% year over year, outplacement firm Challenger, Gray & Christmas said in a Thursday report.
- Overall, U.S.-based employers announced 49,795 job cuts in January. That’s up 28% month over month but down 40% from a year ago. It’s also the lowest January job cut total since 2022, Challenger said.
- Although employers said they planned to hire 6,089 workers in January, a 24% decrease from the nearly 8,000 announced in December, that’s a 13% year-over-year uptick from last year. January 2024 was the lowest hiring on record for that month, according to Challenger.
Dive Insight:
Challenger said closures drove 32% of January’s job cuts across sectors, followed by restructuring efforts, which were responsible for 25%.
“January was relatively quiet in terms of job cut announcements. However, we’ve already seen major announcements in the early days of February, so it seems this quiet is unlikely to last,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in a statement.
The report also pointed to market and economic conditions, cost-cutting measures, bankruptcy and acquisitions or mergers as contributing factors to employment changes. And as California continues to recover from devastating wildfires, Challenger cited natural disasters as an additional factor that influenced job cuts.
“Retailers are coming off a successful holiday season, though in-store traffic fell on main shopping days like Black Friday, according to reports,” Andrew Challenger said. “The retail job has fundamentally changed, and with automation and online shopping, these positions require different skills than ten years ago.”
Although retail job cuts fell 47% for the full year, they spiked by nearly 3,000% in the last month of the year. Still, retail sales in December rose 5.6% to $325.4 billion in the segments Retail Dive monitors, according to the latest data from the U.S. Department of Commerce.
Amid those job shifts, the unemployment rate declined to 4% and total nonfarm employment rose by 143,000 in January, the U.S. Bureau of Labor Statistics reported Friday. The BLS said retail was among a handful of industries that saw job gains, with employment in retail trade rising by 34,000 in January.
Within the retail industry, general merchandise and furniture and home furnishings retailers saw the majority of gains. In contrast, electronics and appliance retailers lost 7,000 jobs, the BLS said. The job gains in January came after overall retail trade employment saw little net change in 2024, the BLS said.
