Monthly layoffs hit eight-month high
A man stands on a street corner hoping to land a job as a laborer or carpenter on in Pompano Beach, Florida.
Stacey Vanek Smith: A study this morning from job outplacement firm Challenger Gray & Christmas found layoffs rose in May to their highest level in eight months.
Joining me now is John Challenger, CEO of Challenger Gray & Christmas. Good morning, John.
John Challenger: Good morning.
Vanek Smith: Your report found job cuts were up more than 50 percent in May over April. Do we have any idea why?
Challenger: Well we've seen cuts up continually over what we saw in 2011. The economy is slowing -- 2 percent GDP folder is just not enough to cause companies to create many jobs.
Vanek Smith: We've been seeing a slow and steady type jobs recovery this year. Does this throw a wrench into that?
Challenger: Certainly it should raise real concerns. The mega layoff we saw from HP that drove the cuts in the month. We don't normally see those in stronger times. The sign of a big company really making decisions as they look into the future to slash jobs and often it means signs not just of heavy competition but of a weakening environment, demand environment.
Vanek Smith: You mentioned Hewlett Packard -- many of the job cuts were coming from computer companies. What's happening there?
Challenger: Well that was the number one area cutting jobs, it was lead by Hewlett Packard. We have seen some growth this year in tech as companies have spent more money on their computer equipment. Some of the smaller companies, medium-sized companies are competing heavily and doing better. But when you see a big company cut this many jobs, it certainly is a big cause for consternation for the entire industry.
Vanek Smith: John Challenger, CEO of Challenger Gray & Christmas. Thank you.
Challenger: Thank you.