Jobs lost to bankruptcies reach 10-year high

In the first seven months of 2019, nearly 43,000 workers lost their jobs when the companies they worked for filed for bankruptcy. That’s higher than the full-year total for any year since 2009.

In all of last year, 36,016 workers lost their jobs, and of those, 30,673 had lost their jobs by July. In 2009, when a total of 50,911 workers lost their jobs, all but 653 of those jobs were lost in the first seven months of the year. Through July 2019, 42,937 job losses have been announced.

Outplacement firm Challenger, Gray & Christmas reported the data on Tuesday, also noting that the bankruptcy filing last month by coal mining firm Blackjewel cost an estimated 1,100 workers their jobs.

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So far in 2019, 11.6% of all announced job cuts have resulted from bankruptcy filings. At the same time last year, 11.3% of lost jobs were attributed to bankruptcy, but by the end of the year, bankruptcies accounted for 5.7% of 538,659 job cuts for the year.

Andrew Challenger, vice-president of Challenger, Gray & Christmas, commented: “We have seen a number of retailers filing for bankruptcy, closing locations, and cutting workers, and indeed, the majority of bankruptcy cuts occurred in that industry. In recent months, however, we’ve seen bankruptcy filings that led to cuts in manufacturing, transportation, and automotive.”

Announced job cuts in the industrial goods manufacturing sector are up more than 500% so far this year, according to Challenger’s July report. More than 52,000 job cuts have been announced so far in 2019, compared with cuts of just under 8,300 for the same period a year ago. The sector lost 4,403 jobs in July, and it is not even the sector where people most commonly lose their jobs. These are the fields with the best and worst job security.

The transportation sector cut more than 5,500 jobs in July, bringing the sector’s year-to-date cuts to 19,039. Seven trucking firms have closed in 2019, the most recent shutting its doors just last week. Overall, nearly 39,000 U.S. jobs were cut in July, a much higher total than July 2018.

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No U.S. automaker has declared bankruptcy, but job cuts through July were nearly three times higher than for the same period last year. There are more than 700 indirect job losses for every 100 autoworkers who lose their jobs. This is part of the major ripple effect from job losses in the auto industry and other manufacturing industries.

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