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Challenger: Planned layoffs reach four month high

At the end of the holiday season, and of another year, January is typically a month with high planned layoff figures as companies assess their financial state. This year was no exception.

Adriene Hill: The number of folks applying for unemployment last week dipped, which is another sign of a recovering jobs market. The number of planned layoffs in January was at a four-month high. But it’s not really as bad as it sounds.

Joining us now live to explain is John Challenger, from Challenger, Gray and Christmas. Good morning.

John Challenger: Good Morning, Adriene.

Hill: So January is typically the heaviest month of layoffs -- why is that?

Challenger: At the end of the year and the beginning are normally the two heaviest times for layoffs. Companies have received their results from the previous year and if things haven’t gone well, they choose to make their adjustments quickly so they can move on.

Hill: Now how is this January different from others?

Challenger: Layoffs were up almost 40 percent from January of 2010 but last year’s January numbers were a record low. Layoffs generally are much lighter than they were during the winters and the early springs of the recession.

Hill: So this isn’t necessarily bad news?

Challenger: It’s certainly not bad news. I mean, anytime you see layoffs, it’s a big concern. But it doesn’t look as though we’re in line for a big new round of layoffs.

Hill: Now, speaking to that, in the last few weeks, we did get news of significant layoffs from Kraft; American Airlines now says it wants to cut 13,000 jobs. Are these just outliers?

Challenger: Well, we’ll see. We have seen more layoffs lately in areas like finance and government and pharmaceutical -- in fact there was a big cut by AstraZeneca today. But the economy looks to be in relatively stable condition. There’s been consistent job creation from the private sector. One reason we’ve seen these recent layoffs is we’ve seen some mergers, some acquisitions -- and those kinds of reasons for layoffs aren’t necessarily signs of weakness or harbingers of things to come.

Hill: John Challenger from Challenger, Gray and Christmas. Thanks.

Challenger: Thank you.

About the author

Adriene Hill is a senior multimedia reporter for the Marketplace sustainability desk, with a focus on consumer issues and the individual relationship to sustainability and the environment.
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