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The biggest mass layoffs of the past two decades


Last Thursday, a technology blogger for Forbes magazine reported that IBM was planning to cut 26 percent of its total workforce — or some 112,000 jobs — in a "bloodbath" of layoffs that would begin this week. Headlines buzzed that this would amount to the biggest corporate layoff in history, and the stock appeared to rise on the news.

By Monday, however, IBM had sharply dismissed the report, calling the rumor "ridiculous" and "baseless," putting the number at more like "several thousand people," and noting it has 15,000 job openings, too. "If anyone had checked information readily available from our public earnings statements, or had simply asked us, they would know that IBM has already announced the company has just taken a $600 million charge for workforce rebalancing," the company said in an emailed statement.

That $600 million charge likely equals about 8,000 people, according to estimates from Sanford C. Bernstein analyst A.M. (Toni) Sacconaghi. If that number turns out to be correct, it's a long way from 112,000 — or any of the largest layoffs in the last two decades.

Another IBM cut, however, does top the list. In July 1993, under former CEO Lou Gerstner, the company cut 60,000 jobs: a mass layoff number that has yet to be surpassed since then, according to the outplacement firm Challenger, Gray & Christmas.

Here's a look at the biggest U.S. layoffs in the past two decades, according to Challenger's data:

Date Organization Industry Number of layoffs
Jul-93 IBM Computer 60,000
Nov-08 Citigroup Financial 50,000
Jan-93 Sears Roebuck & Co. Retail 50,000
Sep-11 United States Army Government 50,000
Feb-09 General Motors Automotive 47,000
Jan-96 AT&T Telecommunications 40,000
Dec-05 United States Air Force Government 40,000
Jan-02 Ford Motor Co. Automotive 35,000
Jan-03 Kmart Corp. Retail 35,000
Jan-09 Circuit City Stores Retail 34,000
Sep-01 Boeing Co. Aerospace/Defense 31,000
Sep-11 Bank of America Financial 30,000
Mar-10 United States Postal Service Government 30,000
Aug-09 United States Postal Service Government 30,000
Jan-02 United States Postal Service Government 30,000
Dec-98 Boeing Co. Aerospace/Defense 28,000
May-12 Hewlett Packard Co. Computer 27,000
Jan-01 Daimler Chrysler Automotive 26,000
Apr-03 Alameda School District Government 25,000
Jun-05 General Motors Corp. Automotive 25,000
Dec-08 Merrill Lynch (Bank of America Merger) Financial 25,000
Sep-08 Hewlett-Packard (EDS) Computer 24,600
Aug-01 Lucent Technologies Telecommunications 24,428
Jan-06 Ford Motor Company Automotive 23,200
Aug-02 Ames Department Stores Retail 22,000
Mar-02 Kmart Corporation Retail 22,000
Jun-05 Winn-Dixie Retail 22,000
Jan-09 Caterpillar Industrial Goods 20,000
Jan-09 Pfizer (Wyeth) Pharmaceutical 19,425

Job cuts — though common this time of year — have declined to their lowest level since 1997, according to recent numbers from Challenger. Still, the firm's report notes that the trends for large tech companies have been moving in the opposite direction. Job cuts in the tech sector rose 77 percent in 2014, with particularly high numbers of layoffs in the computer industry.

IBM's latest "workforce rebalancing," after all, comes not long after a separate $900 million restructuring charge it announced in the first quarter of last year. Between that round and this one, Sacconaghi estimates a total of 20,000 to 22,000 people were cut through the charges taken in 2014. He also expects more cuts in 2015.

An IBM spokesman declined to comment on those estimates beyond a company statement, which noted that Big Blue also hired 45,000 people last year.

Other tech giants also made big cuts in 2014. In July, Microsoft said it was slashing up to 18,000 jobs; and in May, Hewlett Packard said it was cutting up to 16,000. That was on top of the 27,000 job cuts HP announced in 2012, a number that was revised twice and ultimately reached 34,000.

These cuts, especially among the tech sector's giants, reflect an industry in flux, as companies try to shift from old-line hardware and software businesses to higher growth markets like cloud computing. "The large tech companies, particularly, are vulnerable right now because they're in a sector that moves so quickly," says John Challenger, the CEO of Challenger, Grey & Christmas. "Technology becomes outmoded much more quickly, leaving some of the big companies a little bit more susceptible to some of these large layoffs."

Challenger said his firm started tracking mass layoffs as the early 1990s recession, when a wave of "reengineering" efforts started producing eye-popping job cut numbers. He remembers the massive 1993 IBM layoff as a milestone moment, one that marked "the end of the era where lifetime tenure was possible."

Just two years earlier, before Challenger began tracking mass layoffs, General Motors had said it would eliminate 74,000 jobs. Then, a few years later, in 1996, Sunbeam's "Chainsaw" Al Dunlap announced a far smaller cut of 6,000 workers — but it was huge in percentage terms, making up roughly half the company's employees.

Challenger's list of the largest mass layoffs shows how they tend to result from seismic changes in certain industries, whether that be the tech sector's current shift or the U.S. auto industry's struggles. Yet it also reminds us of the painful job carnage that the financial crisis, the recession and the slow economy of recent years has brought. Nearly half of the mass job cuts on Challenger's list happened between 2008 and 2012. Citigroup, for instance, announced it would eliminate some 50,000 jobs in November of 2008, just after the financial crisis began, and General Motors said it would cut 47,000 jobs in February of 2009 amid further bailout requests.

Read also:

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