Financial services hit hard by 2008 job cuts

Employers announced plans to eliminate another 166,348 jobs in December, the largest December job-cut total on record, according to a report released today by Challenger, Gray & Christmas, Inc.

The financial services sector of the US economy was hit especially hard, noted Challenger Gray, a global outplacement consultancy in Chicago that began tracking layoffs in 1993.

Last month, financial services companies announced plans to cut 39,604 jobs, a firm spokesman wrote in an e-mail.

The firm said that overall December job cuts for the US economy were 8.4 percent lower than the seven-year high of 181,671 in November, but that last month’s total was nearly four times larger than December 2007, when employers announced 44,416 job cuts, the lowest December total since 1999.

Job cuts for all of 2008 were dominated by the financial sector, which announced plans to shed 260,110 workers, the firm said. That is the third largest annual industry total on record behind the 317,777 job cuts and 268,851 job cuts announced by the telecommunications sector in 2001 and 2002, respectively, Challenger Gray said in a press release.

The financial services industry has a major presence in Massachusetts. An October story in the Globe noted a projection from the forecasting firm Moody's Economy.com that the Massachusetts financial services industry could lose 7,200 jobs, or 4 percent of the sector's local work force, by the end of this year. As of October, the Massachusetts financial services industry was estimated to have 179,800 jobs, accounting for 5 percent of the Bay State's total work force, Moody's Economy.com said. To read that October story, please click here.

For the overall US economy, employers announced 1,223,993 job cuts in 2008, the largest annual total since 2003, which saw 1,236,426 job cuts, Challenger Gray said in a press release, and the year-end total for 2008 was 59 percent higher than the 768,264 layoffs announced in 2007.
(By Chris Reidy, Globe staff)