Corporate Job Cuts in June Rose 56% From May: Challenger Survey

After a brief lull in job cuts, workers were once again handed more pink slips in June, according to data from outplacement firm Challenger Gray & Christmas.

Challenger said the number of layoffs announced by U.S. companies rose 56% in June to 124,852 from 80,140 in May, bringing the six-month total to more than 770,000. Last month's total contrasts sharply with the 17,241 job cuts in June 2000, which marked a three-year low.

In the second quarter, job cuts fell 9% to 370,556 from 406,806 in the first quarter, but rose from the year-ago period when terminations came to 81,568, the Challenger report indicated. The beleaguered telecom sector, which includes companies like Nortel (NT) and Lucent (LU), led all industries in cutting jobs, with 130,442 this year and 27,446 in June. Auto companies laid off 87,613 workers and computer companies handed out 74,723 notices.

Meanwhile, this morning's report by the Labor Department showed that the number of Americans filing for initial jobless benefits increased by 7,000 to 399,000 for the week ended June 30, in line with expectations. The number of unemployed individuals remaining on the benefits list rose, as continuing claims climbed 5,000 to 3.03 million, the highest level since early November 1992, when the U.S. economy last faced a recession.

"The good news for displaced workers as well as for the economy is that the jobs that are being affected the most by downsizing are still in demand," John Challenger, the chief executive of Challenger Gray & Christmas, said in a statement. "This is why the unemployment rate has not increased at nearly the same rate as job cuts."

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