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Challenger: Planned layoffs spike during July

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Microsoft layoff announcement dominates figure.

The unexpectedly large layoffs announced by Microsoft helped push July job cuts to the second highest level of the year. In all, U.S.-based employers reported plans to reduce payrolls by 46,887 during the month, according to the report released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The July total was up 49 % from June’s 31,434 job cuts, which was the fewest number of cuts announced, year to date. It was 24% higher than the 37,701 cuts recorded in July 2013. The only month to see more job cuts so far this year was May, when job cuts reached 52,961.
Employers have announced 292,921 job cuts, to date. That is 1.3% fewer than the 296,633 job cuts announced in the first seven months of 2013.

“The large job cuts in the computer industry are certainly not a sign of a stalling economy."

July job-cut news was dominated by Microsoft, which announced plans to reduce its workforce by as many as 18,000. That is the largest downsizing in the company’s history. It is also the largest layoff announcement this year, surpassing fellow tech giant Hewlett-Packard’s announced plans to shed as many as 16,000 workers from its payroll.

The combined cuts by H-P and Microsoft have helped make the computer industry the leading job-cut sector through July. Computer firms announced a total of 48,361 job cuts in the first seven months of 2014, 125 percent more than the 21,517 recorded during the same period a year ago.

“A large portion of the Microsoft job cuts were related to its acquisition of Nokia in 2013. However, like Hewlett-Packard, the tech giant is attempting to streamline in order to become more nimble and competitive in an industry that is constantly changing. Both companies were slow to react to the shift from PCs to mobile and simply do not want to get caught flat-footed again. In order to do that, both companies had to flatten the bureaucracy and foster a more entrepreneurial approach to decision making,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

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