The transition from brick-and-mortar physical locations to digital is continuing to shake the retail industry, as the February jobs report from Challenger, Gray & Christmas shows.
Overall, the month was a good one for employment, with the total number of layoff announcements (36,957) down 19 percent from January (45,934). Announced job cuts for the first two months of 2017 are down 40 percent from the same period last year, the global outplacement firm notes, while the total number of new-hire announcements for January and February is at an all-time high of 162, 266 workers.
Retail workers aren’t sharing in the good news, however: The retail industry leads all sectors in job cuts, with 11,889 announced in February and a total of 34,380 job cuts for the first two months of this year. The workforce at J.C. Penney was among the hardest hit, with the company announcing plans last month to close 140 stores and eliminate 5,500 jobs. The number of slashed positions in retail is 580 percent more than the 5,930 cuts announced last month by the energy sector, the next-highest industry.
“Retailers are experiencing a tremendous transformation from the traditional business model,” says Andrew Challenger, vice president of Challenger, Gray & Christmas. “The cost of digitizing merchandise, moving sales to online, and downsizing physical stores will likely take a toll on employees in this field.”
Of course, not all retailers are performing poorly — just look at Amazon, which announced plans to hire 100,000 workers in January. Indeed, the retail industry seems to be hiring nearly as many workers as it’s letting go, with 33,000 hiring plans announced through February, Challenger notes. Much of these new positions are in technology and customer service, as retail chains beef up their e-commerce platforms to better compete with the likes of Amazon.
“The new retail employee will need considerable tech abilities, in addition to the necessary customer service experience,” says Andrew Challenger.
Meanwhile, higher energy prices and an industry-friendly presidential administration (new Environmental Protection Agency Secretary Scott Pruitt has said carbon dioxide is not a primary contributor to global warming, for example) have led to a sharp decrease in job-cut announcements by the energy industry compared to last year. Energy companies have announced 5,930 job cuts so far this year, compared to 45,154 job cuts during the same period in 2016.
Below is additional information from Challenger’s latest jobs report:
Top Five Industries for Job Cuts
|MONTH BY MONTH TOTALS|
|Some reductions are identified by employers as workers who will take early retirement offers or other special considerations to leave the company.|
|Year To Date|
Source: Challenger, Gray & Christmas