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Job cuts hit 14-month high
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April 8, 1997: 4:14 p.m. ET
Major U.S. firms announced 50,182 job cuts in March -- highest in Jan. '96
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NEW YORK (CNNfn) - Springtime in March brought a lot of pink into the U.S. workplace, as major American companies announced plans during the month to give pink slips to more than 50,000 workers.
The employment firm Challenger, Gray & Christmas reported Tuesday that U.S. firms disclosed plans to cut a total of 50,182 jobs -- the highest monthly number of cutbacks since January 1996.
"We are no longer seeing the blockbuster cuts in the tens of thousands that cause big headlines," John Challenger, executive vice president of Challenger, said in releasing the figures. "Instead, we are seeing cuts of 2,500 (to) 5,000. While most announcements of that size do not get a lot of media coverage, those are the ones that give us (big) figures such as those in March."
Challenger, Gray reported that March job cuts rose 33.9 percent from March 1996's 37,486 announced reductions, as well as 24 percent from the 40,480 job cuts disclosed in February 1997.
For 1997's first quarter as a whole, job cuts rose 17 percent from the 114,850 reductions announced in 1996's fourth quarter.
However, the first quarter's total fell 20.4 percent from the 168,695 job reductions announced in first quarter 1996, when AT&T unveiled a major downsizing plan.
Tuesday's figures came out just days after the Federal Reserve raised U.S. interest rates.
The Fed tightened credit conditions because the central bank apparently felt the current strong U.S. job market could spark inflationary wage hikes.
But John Challenger said the latest figures "may be evidence that the Federal Reserve Board may have jumped the gun in raising interest rates, perhaps not taking into full account the measures companies are taking to self-correct.
"Companies fear inflation as much -- if not more than -- (Fed Chairman Alan) Greenspan, because they know that if they try to pass on higher costs to consumers, they will be eaten alive by competition."
Among individual sectors, defense companies led all industries in announced job cuts during March, with 5,694 reductions disclosed.
The computer and financial-services sectors checked in at the next two spots, with 4,897 and 4,645 job cuts, respectively.
Sectors with the fewest March layoffs included electronics, media and construction, with 200, 174 and 100 announced layoffs, respectively.
By region, the West/Southwest faced the most job cuts during March, with 19,731 announced reductions.
The East and Midwest checked in at the middle of the heap, with 10,987 and 13,056 cutbacks, respectively.
The South recorded the fewest job cuts, with 6,408 reductions announced.
--Will Morton
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U.S. Labor Department
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