The Challenger report for announced layoff intentions in August shows a 193.2 percent increase to 75,891 from 25,885 in July. The sharp rise follows four straight months of declines, but the August increase should be treated with caution. Unless coming months see a substantive increase in planned layoffs, this should be read as a one-off. Intentions are up only 1.0 percent compared to 75,151 in August 2024. The pace of layoff intentions for January-August 2024 is 536,431, a little below 557,057 in the same period in 2023.

Once more the tech sector is the main cause of the increase in layoff plans. Technology has 39,563 intentions, accounting for 52.1 percent of the total. The tech sector continues to try to cut costs through layoffs. Year-to-date the tech sector has 105,426 announced layoffs, although this is below the 149,452 in the first eight months of 2023.

Reasons cited for planned job cuts in August are mainly from 37,403 in cost cutting and 16,429 in market/economic conditions. Cost cutting accounts for 49.3 percent of all intentions and 21.6 percent of the total in August. Also notable is that 5,943 cuts are attributed to artificial intelligence and 9,518 to non-AI technology cuts.

Plans to hire remain soft in August despite a 66.0 percent increase to 6,101 after 3,676 in July. Hiring plans are down 21.2 percent compared to 7,744 in August 2023. Hiring plans are often soft in August as businesses are planning their needs for the upcoming winter shopping season. However, hiring intentions are likely to remain well below last year. For 2024 to-date, hiring intentions total 79,697 compared to 135,980 in the same period in 2023. Businesses will be watching the bottom line carefully during a period of uncertainty with signs of slower economic growth, likely easing in financial conditions in the coming months, and a contentious political climate to navigate.

This monthly report counts and categorizes announcements of corporate layoffs based on mass layoff data from state departments of labor. The job-cut report must be analyzed with caution. It doesn't distinguish between layoffs scheduled for the short-term or the long term, or whether job cuts are handled through attrition or actual layoffs. Also, the job-cut report does not include jobs eliminated in small batches over a longer time period. Unlike most economic data, this series is not adjusted for seasonal variation.

The job-cut report is basically a rehash of the weekly jobless claims report but provides additional insight into where layoffs are occurring. There is industry and geographic (states) detail that is not available with weekly jobless claims.