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Fewer jobs cut in May
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June 4, 2001: 4:50 p.m. ET
Rapid pace of downscaling announcements slows after torrid five months
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NEW YORK (CNNfn) - The number of job cuts announced by U.S. companies fell in May from April after topping 100,000 in each of the past five months, a leading job recruitment company said Monday.
Challenger, Gray & Christmas Inc., which tracks job cut announcements, said U.S. companies announced 80,140 cuts in May, down 52 percent from the 165,564 announced in April, but still up sharply from the 27,031 cuts announced in May 2000.
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 John Challenger, CEO of Challenger, Gray & Christmas Inc., talks about job cut announcements. |
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Technology companies continued to cut the most jobs, Challenger said, with the computer, telecommunications and Internet/e-commerce sectors alone setting 31,439 cuts in May, or about 39 percent of the total for the month.
Since the start of the year, those three sectors and the electronics sector have announced 268,437 job reductions, about 41 percent of the job cuts announced in 2001.
Click here for more on job cuts
"In December, the high-tech bubble began to burst and, since then, the number of cuts in this sector have substantially outpaced those in any other industry," John Challenger, chief executive officer of the firm, said in a statement.
The 652,410 job cut announcements in the first five months of 2001 were more than the 613,960 announced in all of 2000, Challenger said.
Job cut announcements are not the same as actual job cuts, and companies could take weeks or months to implement announced reductions. In fact, the U.S. government Friday reported payrolls in businesses other than farms fell by 19,000 jobs in May, significantly less than the number of announcements reported by Challenger.
But the government's figure is the total of jobs created and jobs cut in May, so weak sectors such as manufacturing -- which the government said lost 124,000 jobs in May -- are offset by sectors such as service, which added 70,000 jobs.
U.S. businesses have cut jobs as the economy slowed and corporate profits fell. The Federal Reserve has cut interest rates five times in 2001 in an effort to make money more available, boost consumer spending and avoid a vicious cycle that will pull the U.S. economy into recession.
The U.S. unemployment rate declined in May after rising for several months and jumping to a 2-1/2 year high in April. 
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