In the first quarter, job cuts totaled 262,840, which is 28% lower than the fourth quarter of 2003 (364,346) and 26% lower than the first quarter of last year when job cuts totaled 355,795. The 12-month moving average, which smoothes out volatility in month-to-month tabulations, fell to 95,289 in March from 96,736 in February.
February was the first time the moving average was below 100,000 since June, 2001.
The 12-month moving average is calculated by adding the job cuts announced in the latest month to those in the previous 11 months and dividing the total by 12.
"The heavy job cutting we have seen over the past three years appears to be trending down," said John Challenger, Challenger's CEO. "However, the job market seems to be in a state of limbo, where companies are eager to hold on to the people they have but many are reluctant to create any new jobs."
According to Challenger, the reasons behind the lack of across-the-board hiring, include increased outsourcing, improved productivity and the wooing of older workers to stay.
"One explanation that has not been discussed relates to the issue of mass retirements that are facing a number of industries, automotive in particular," said Challenger. "To prevent a mass exodus of experienced workers, many companies may be making it very worthwhile for those nearing retirement age to stay on the job. Employers know they are far better off with a seasoned, senior staff versus the cost of acquiring and training replacements in a period when the customer is king, yet the direction of the economy is unclear."
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This article was compiled and edited by CIO Update staff. Please direct any
questions regarding its content to Allen Bernard, Managing Editor.
This article was compiled and edited by CIO Update staff. Please direct any questions regarding its content to Allen Bernard, Managing Editor.