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Job cut announcements jump
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August 6, 2001: 10:08 a.m. ET
Outplacement firm say job cut announcements three times year-ago number
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NEW YORK (CNNfn) - Companies announced 205,975 job cuts in July, more than triple the figure a year earlier and the most in eight years of tracking such data, an outplacement firm reported Monday.
The July figures pushed the total job cut announcements up to 983,337 so far for 2001, the Challenger, Gray & Christmas Inc. report said.
The figure contrasts with the government's unemployment report for July released Friday, which indicated the rate held steady, although manufacturing, the hardest hit sector during this latest economic slowdown, shed 49,000 jobs.
The Challenger report also indicated that manufacturing was hardest hit, with the most announcements coming in telecommunications, computers, electronics and industrial goods. About 45,000 telecom cuts were announced in July, along with 26,321 computer cuts and 22,800 electronics cuts. The industrial goods sector saw 20,381 announcements, according to the report.
"Companies are looking at their staffing needs for the balance of 2001 and the numbers do not present a very positive picture," said John Challenger, CEO of Challenger, Gray & Christmas. "The most worrisome aspect of the job-cut numbers, in terms of serving as an economic barometer, is the fact that job cutting has been heaviest in both manufacturing and technology."
During the slowdown, which began last year, manufacturers have eliminated jobs in an effort to cut costs and streamline inventory to adjust for decreased demand from wholesalers and consumers.
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Consumers, whose spending accounts for two-thirds of the economy, have held fairly steady, continuing to purchase items -- although at a more reserved pace than a year ago as they shift from department and specialty boutiques to discount chains such as Wal-Mart (WMT: down $0.51 to $53.66, Research, Estimates) and Kmart (KM: Research, Estimates)
The Challenger report noted that the number of job-cut announcements in retailing is substantially less since the beginning of the year, totaling more than 56,000 so far this year. The sector announced about 7,900 job cuts in July, the report said.
"It is a favorable sign that retailers have not joined in the job-cutting spree," Challenger said. 
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