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During July, planned job cuts by American employers increased 31 percent to 97,373. This was the first increase in monthly job cuts since January, according to a report by Challenger, Gray & Christmas, Inc. In fact, planned job cuts had fallen to a 15-month low during June, when job cuts decreased by 33 percent to 74,393.

However, the July total was still 6 percent lower than this time last year, when employers planned on cutting 103,312 positions. This makes June the second consecutive month during which the job-cut total was lower than the same month last year.

Overall, employers have announced 994,048 job cuts this year, which is 72 percent more than the 579,260 job cuts announced during the first seven months of last year. The year-to-date total is now only 230,000 job cuts away from surpassing the 1,223,993 jobs cut during all of 2008.

“After June’s surprisingly low job-cut total, a July rebound was not entirely unexpected,” John A. Challenger, CEO of Challenger, Gray & Christmas, said. “While there are signs that the economy is stabilizing and the pace of layoffs slowing, we are still a long way from a full recovery. In fact, monthly job cuts are likely to return to levels in excess of 100,000 by the fourth quarter.”

The increase in job cuts during July was mostly due to firms in the transportation industry, which announced plans to reduce 27,954 positions during July, an increase of 400 percent from the 5,587 jobs cut during June. So far this year, employers in the transportation industry have announced 61,578 job cuts, a 13 percent increase from the 54,411 jobs cut during July 2008.

The telecommunication sector also had a significant increase in layoffs during June, with job cuts increasing from 802 during June to 17,601 during July, an increase of 209 percent.

The automotive sector, which so far leads all other industries in year-to-date job cuts with 122,212 positions eliminated, has seen layoff announcements decrease during the last three months. Companies in the sector announced 2,716 job cuts during June, which is the lowest monthly total for the sector since June of last year, when there were 2,356 job cuts.

“Declining layoffs in the automotive industry may not be indicative of a turnaround,” Challenger said. “Instead, these employers simply may not have any room for additional job cuts if they hope to build new fleets of more eco-friendly cars. With consumer and business spending at a standstill, transportation companies have little choice but to make further cutbacks in staffing. However, we could see a surge in hiring around the holidays, even if there is only a marginal increase in retail sales.

“The job cuts in the telecommunication sector, on the other hand, appear to be more permanent,” he added. “The cuts, led by workforce reductions in Verizon Communication’s land-line division, reflect a shift in consumer demand from traditional telephone service toward wireless-communication options. The hope is that increased hiring in the wireless sector will help offset some of the losses in the more traditional divisions.”

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