Overall Layoffs a Growing Concern
The August Challenger report says 53,480 Announced Cuts Led by Tech, Trade Issues a Growing Concern
U.S.-based employers ramped up the pace of downsizing in August, as companies announced plans to cut 53,480 jobs from their payrolls. This is up 37.7% from July’s total of 38,845, according to the latest report on job cuts released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
August’s total is the fourth highest for job cuts this year, and marks the eighth consecutive time job cuts were higher than the corresponding month one year earlier. Last month’s total was the highest August total since 2009, when 76,456 cuts were recorded.
The August total is 39% higher than the 38,472 cuts announced in August 2018. So far this year, employers have announced plans to cut 423,312 jobs from their payrolls, up 36.2% from the 310,773 cuts in the first eight months of 2018. It is the highest eight-month total since 2015, when 434,554 cuts were announced.
“Employers are beginning to feel the effects of the trade war and imposed tariffs by the U.S. and China. In fact, trade difficulties were cited as the reason for over 10,000 job cuts in August,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
“We are continuing to see investor concerns shaking confidence in the market, and employers appear to be cutting workers in response to a slowdown in demand for their products and services,” he added.
Retail continues to lead all sectors in 2019 with 57,226 cuts, 2,059 of which occurred last month. That is 28% fewer cuts than the 79,478 announced in the same period last year. The Automotive sector has announced 36,148 cuts so far this year, the highest eight-month total since 2009, when 128,906 jobs were cut.
While job cuts are up in every region, companies located in the Southern United States have seen the largest jump in job cut announcements, as employers in this region have announced 53% more job cuts than through the same period last year: 90,337 compared to 58,964 in 2018. Companies in the Eastern United States had the second-largest percentage increase, with 46.6%, as employers in this region announced 119,689 cuts in 2019 compared to 81,616 last year
CEOs Abandon Ship
Via email from Challenger, 159 CEO Exits in August.
CHICAGO, September 11, 2019 – Increased churn continues at the chief executive position, as employers at U.S.-based companies announced 159 chief executive officer changes, the highest monthly total on record, according to a report released Wednesday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Last month’s total was 28% higher than the 124 CEO exits announced in July. It is 3% higher than the 154 CEO changes announced in the same month last year, the previous highest monthly total. August marks the seventh time this year that CEO changes were higher than the corresponding month one year earlier.
So far this year, 1,009 chief executives have left their posts, 15% more than the 879 CEOs who left the top spot at companies through August 2018. It is the highest total of CEO exits in the first eight months of a year since Challenger began tracking in 2002.
Chief executives are leaving at a faster clip than even during the recession. In 2008, the next highest year for CEO turnover, 992 CEOs had announced their exits through August, 2% lower than the current year-to-date total.
“With growing uncertainty surrounding global business and market strength, the fact that so many companies are choosing this moment to find new leadership is no coincidence,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
Challenger tracks CEO changes at companies that have been in business for at least two years, with a minimum of ten employees.
CEO Exits By Sector
- Companies in the Government/Non-Profit sector continue to lead all sectors in CEO exits with 218.
- The Technology sector announced the second-highest number of CEO changes this year with 134, up 34% from the 99 who left their posts through August last year.
- Health Care/Products companies and manufacturers have announced 83 CEO exits, down 2.3% from the 85 who announced their departures through August last year.
- Industrial Goods manufacturers, who have been particularly hard hit with trade issues, regulations and deregulation, have announced 44 CEO changes in 2019, 132% higher than the 19 announced through the first eight months of 2018.
- Meanwhile, Energy companies announced 43 CEO changes this year, up 139% from the 18 CEOs who left their posts in this industry through August last year.
Darn “Boneheads”
Layoffs up, CEOs quitting, jobs picture weakening.
Not to worry, this is the strongest economy ever.
Which of course is why Trump Calls Jerome Powell and the Fed “Naive Boneheads” for not cutting rates to zero or negative.
Mike “Mish” Shedlock
There is also more executives cashing out. There was Jeff B taking out billions about 3 weeks ago?, and a few smaller amounts (still double digit millions) by multiple CFO types taking money out. Interesting times. I again see “hot potato” contest among investors to see who will be holding the dropping investments.
The financial system would ve been ever so healthy on a european scale and even globally without that FCKN insane, disruptive freaky euro currency ; it was blatantly unfair and undemocratic to shove that shit down our throats or up our a***s…. and to think they were supposed to be intelligent people those that came up with this utter monstrosity…Megalomania is a bad advisor , the future will show …
oh….this should be a comment on a more recent ECB topic…
Oracle CEO gone on sick leave.
Bet there’s pressure at the top as markets struggle for growth.
Wow! You found a bad statistic to highlight.
Jobs are plentiful, unemployment is low, wages have moved up. Minority employment is best ever!
But CEO employment is becoming volatile. How awful!!
“… companies located in the Southern United States have seen the largest jump in job cut announcements….”
Oh it just warms the cockles of my heart to see people who know what they want get it good and hard.
Debt is not money.
Is anybody else seeing the “Are you a robot?” message every time someone posts a Bloomberg link?
I see it too, it just means you’re blocking (or not allowing) scripts to run from bloomberg.com.
I seriously doubt the stock market is going to collapse as some of the doom porn seems to suggest. But at the same time the market is very richly priced. For CEOs with large option grants and/or large holdings in restricted stock (by law or by appearance), it would be imprudent not to diversify holdings (and maybe allocation too). Can’t do that while in the CEO suite.
At the same time, most of these CEOs have done precious little but keep the seat warm over the last decade.
Laying people off is not growth. Share buybacks are done because re-investing in the business has a lower expected return. These leaders don’t have a vision to move the company forward, otherwise they would be funding it instead of buybacks.
Leave now on a high note, or face the wrath of torches and pitch forks when it becomes obvious to the masses that the CEOs were paid handsomely but haven’t done anything in a decade
Exactly. Valuations are near all time highs. That is the time to head for the exits while the party winds down.
“Companies in the Government/Non-Profit sector continue to lead all sectors in CEO exits with 218.”
Higher turnover because of tax-favored status I assume. In what type of system can this happen ?
Leave before the tax audits start
Most of those non-profit entities are scams. Money raised goes to employee perks and to fund raisers; very little goes to whatever cause they were supposed to help.
As the IRS runs out of businesses to squeeze, they will have to follow the money… the money is in non-profits, and the CEOs of those scams don’t want to be around when the auditors show up
“As the IRS runs out of businesses to squeeze, they will have to follow the money”
That’s how the wagon circle of all totalitarianopias always get smaller and smaller over time. The outer layers of those who were beneficiaries of the rackets yesterday, need to be sacrificed to allow the inner circles to remain flush today.
The CEO of VA health systems has sued 36,000 people who didn’t want to pay $30 for an aspirin and $2000 for a feeding tube. The “non profit” CEO makes well over a million dollars per year
Screw Obama and his signature scam
Which companies are counted? Every little joke tech startup has a CEO.
Uber and Lyft have no profits and no expectation of profits anytime in the near future. Tesla keeps promising all sorts of unicorns and rose scented farts, but its got too many problems to list. SolarCity got bailed out by Tesla and is even worse shape. WeWork has no expectations of profits ever, and thinks it can IPO for $25 billion with a “B”
None of those CEOs have been held accountable yet
If you include proceeds from selling paper in the profit calculation, which is pretty much the only thing American companies is competitive at anymore, they’re all doing just fine.
I took accounting 101, so I don’t consider financing activities to be profit at all.
But somehow Elon Musk is a genius for doing something that would get most people charged with fraud.
I doubt mom and pop CEOs who “donated” less to political campaigns than Mush could stick their middle finger up at the SEC while smoking a joint…. and get away with it!
Shut the SEC down, save billions. They don’t enforce the law evenly.
Hurry hurry … grab that golden parachute … before it turns to bronze.
Growing supply chain casualties.
CEO’s doing the loot and scoot just as they were trained in college. NEXT……
Does it account for retiring?
Might some be cashing out options & a sign of topping?
I think you are pretty accurate. That and a declining economy are to blame. Record debt and a deflationary economy are what is going on right now and it will only get worse.
Cashing out was the first thing that came to mind too. Executives have plenty of access to financial data to know when it’s time to leave.