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Job cuts increase again
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May 3, 2001: 11:18 a.m. ET
April layoffs, deepest in survey's 9-year history, bring 2001 cuts above 500K
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NEW YORK (CNNfn) - The pace of job cuts picked up again in April as U.S. companies said they were cutting nearly 166,000 jobs, according to a survey released Thursday, the fifth straight month the number of announced cuts has topped 100,000.
The survey by Challenger Gray & Christmas, a Chicago-based outplacement firm, found 165,564 job cuts announced in April, up 2 percent from 162,867 in March.
April's cuts were the greatest in the nine years the survey has been taken, eclipsing the prior record set in March.
The December-April period marked the first time the survey recorded five straight months with more than 100,000 cuts announced, the firm said.
The hardest-hit sectors were telecommunications, computers, financial services, industrial goods, and electronics.
John Challenger, CEO of the firm, said this distribution of cuts was due to reining in of technology spending. Some previously battered sectors such as retail and automotive escaped relatively unscathed in April's survey, but Challenger said the extent of layoffs in technology raises concerns as to which sector will be next.
"The whole tech sector is seeing people pushed out in numbers that dwarf even the numbers we were seeing in industrial sector and retail sector," he said. "The question is there another sector that is going to [get] hit? Is this going to hit the service sector next?"
Challenger said that despite the previous months' job cuts, he was shocked by the latest survey result.
"There have been more reports recently that the economy is bottoming out, that a recovery is likely in the second half," he said. "It doesn't make sense that these companies would be cutting in these numbers if they're looking for a rebound."
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Still, Challenger said that his clients are finding a strong job market, despite the latest cutbacks.
"We're seeing search times at 2.27 months," he said. "That's very low by historical standards. What that suggests to me is how pent up the demand was for hiring, especially by firms that weren't able to compete for job candidates last year."
During the first four months of the year 572,370 job cuts have been announced, more than triple the 179,144 announced in the same period a year earlier. Another month of 100,000 cuts would likely put 2001's results above the survey's full-year total for each of the previous three years.
The survey comes as the U.S. Labor Department reported that new claims for state unemployment benefits rose 9,000 to 421,000 last week, about 8 percent above forecasts.
The survey also precedes Friday's report on employment data that is expected to show the nation's unemployment rate rose to 4.4 percent in April from 4.3 percent in March, although the economy is seen adding 25,000 jobs overall after the loss of 86,000 jobs reported in March.
But the number on the net change in employment levels is one of the most difficult to forecast. Challenger said that since more companies are announcing that the cuts already had been made, rather than saying the cuts would take place at some point in the future, it's very possible that the April payroll number will again show a decline. 
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