Companies hack away at jobs

Businesses announce 88,736 job cuts in August, 14% below July, but cuts from May though August hit highest level in 6 years.

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By Kenneth Musante, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- The number of summer job cut anouncements reached its highest level since 2002, according to a report released Wednesday.

From May through August, employers said they would cut 377,325 jobs, according to employment consultancy Challenger, Gray & Christmas, Inc. That's nearly 30% more than during the first four months of the year.

The number of job cut announcements usually dips during those particular months as business slows down over the summer, Jim Pedderson, a Challenger spokesman, said.

During the summer of 2002, in the wake of the 2001 recession, companies said they would cut 378,777 positions, according to the report.

Businesses tried to cut jobs this summer as they were hit by "the double whammy of limited access to credit and the high price of oil," said chief executive John Challenger.

Downsizing relief

Despite the summer climb, plans to reduce labor forces tapered off last month from July as oil prices fell from their highs.

The number of announced job cuts fell to 88,736 in August compared with 103,312 in July, but remained more than 12% higher than the same period last year, the report said.

Planned job cuts in the financial sector, which has been suffering from mortgage and credit market losses, also declined.

The number of announced layoffs in the financial sector fell to their lowest level since July 2007, totaling 2,182, down from 14,396 job cuts averaged over the previous seven months, according to the report.

"It might suggest that [credit] conditions are beginning to relent," John Challenger noted. But don't look for significant relief anytime soon, he said.

"It is too early to say that the decline in financial job cuts last month marks the start of a turnaround for the industry," he remarked in a press release. "Many firms are still experiencing major losses in earnings and could make more workforce reductions as 2008 comes to a close." To top of page

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