Planned layoffs jumped in October on drug, financial firm cutbacks
WASHINGTON -- Planned layoffs by U.S. employers jumped 13.5% last month, led by cutbacks at pharmaceutical and financial services firms, according to a report Wednesday.
Employers announced plans to cut 45,730 jobs in October, up from 40,289 the previous month, said outplacement consulting firm Challenger, Gray & Christmas Inc.
Despite the increase, the October figure was down 4.2% from the same month a year ago. It was the first time in five months that year-over-year layoffs were lower.
The report came as the Labor Department prepared to release the October jobs report on Friday.
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Delayed a week by the partial government shutdown, the report is expected to show the economy added 120,000 net new jobs last month, down from 148,000 in September.
Economists project the unemployment rate will tick up to 7.3%, in part because of the furlough of federal workers during the 16-day shutdown.
The October jump in layoffs was fueled by 10,585 job cuts announced by pharmaceutical companies, Challenger said. Most of those are from drug-maker Merck & Co., which said it would lay off 8,500 people as the company overhauls its research and development operations.
Banks and other financial services companies announced 8,717 layoffs last month. Among those were 4,200 job cuts planned by Bank of America, including 1,200 in its mortgage division because of a slowdown in home refinancing as interest rates have risen.
The financial sector has announced 57,591 job cuts this year, the most of any sector, Challenger said. But those layoffs aren’t all bad news, said John Challenger, the consulting firm’s chief executive.
“The banking sector is cutting work-force levels as a direct result of an improving economy,” he said. “Furthermore, improvements in the economy are also pushing interest rates back up, which is curbing demand for refinancing.”
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