Government Leads Surge in Planned Job Cuts

Government Leads Surge in Planned Job Cuts

job cuts jump 61% in march to 67,611;

2010 pace still well below last year

CHICAGO, April 1, 2010 - Employers announced plans to reduce payrolls by 67,611 jobs in March, a 61 percent increase from the previous month, according to the latest report on monthly downsizing released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

          March marks the second increase in job cuts in three months, after a 59 percent gain was recorded in January.  However, the significance of the March increase is tempered by the fact that it follows a February job-cut total of 42,090, the lowest in nearly four years (July 2006: 37,178). 

          Overall, the pace of downsizing is well below last year's levels.  March job cuts were down 55 percent from the same month a year ago, when 150,411 planned layoffs were announced.  The first-quarter total of 181,183 is 69 percent lower than the 578,510 layoffs announced in the first quarter of 2009.  The first quarter is, in fact, the lowest Q1 total since 2000.

          March job cuts were dominated by planned reductions on government payrolls, which totaled 50,604 or nearly 75 percent of all planned layoffs announced during the month.  The majority of the government cuts came from the United States Postal Service, which plans to reduce its headcount by 30,000 workers this year.  Since USPS is not permitted to lay off employees, it will achieve the reductions through retirements and attrition. 

The other 20,604 public-sector job cuts came from state and local agencies, including many school districts, which all continue to suffer massive budget shortfalls.  Year to date, government employers have announced 61,800 job cuts, or about one-third of all announced layoffs.

Government/Non-Profit Sector Job Cuts

2002 - 2010


Q1 Total

Annual Total




























*record high

Trailing well behind the government sector, the second-ranked pharmaceutical industry has announced 26,165 job cuts this year, which is 46 percent fewer than the 48,885 pharmaceutical jobs cut in the first quarter of 2009.

Employers in the retail sector have announced the third largest number of job cuts this year with 20,368.  Most of those cuts occurred in January.  The Q1 total is down 73 percent from last year, when retailers announced 76,548 first-quarter job cuts. 

"Most industries have seen sharp declines in the number of layoffs this year, compared to the beginning of last year.  The first quarter of 2009 really marked the peak of downsizing for this recession.  Unfortunately, many people are still jobless and many businesses still shuttered.  This combination is having a significant negative impact on state and local tax revenues and, in turn, leading to continued downsizing in this sector," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

"However, many state and local governments have yet to take full advantage of the recovery stimulus packages that award federal contracts, grants, and loans to individual states and territories in order to spur job creation.  Of the $182.5 billion earmarked for these awards, the states have only used $54.6 billion," Challenger noted.

"Unfortunately, governments - even the more nimble state and local agencies - are hampered by bureaucracies that slow the planning, approval and implementation of the types of projects that will create jobs," he added.

"While downsizing has slowed significantly in most other areas of the economy, we have yet to see a turnaround in hiring.  Employers are always cautious when it comes to adding new workers, particularly when the economy is still relatively fragile.  Once they begin to add workers in earnest, it is a slow process.  As many experts have noted, the unemployment rate will experience a very slow decline.  In fact, it could take at least five years for it to return to pre-recession levels, even with strong job creation. 

"It is important for job seekers to manage their expectations.  A job is not going to come easily in the recovery.  It will take a lot of hard work, creativity, networking and going beyond one's comfort zone in terms of aggressiveness and exposure to rejection.  It is going to take many job seekers longer to find a job than they would like and many may have to accept a lower salary if they want to get back on a payroll.  Do not make the mistake of assuming no one is hiring.  Companies are hiring and more will be doing so in the coming months, so it is critical to persevere," Challenger advised.