A sharp decrease in planned layoffs signals health in the finance sector and the possibility of increased hiring throughout 2011, according to a report by Chicago-based outplacement company Challenger, Gray & Christmas.
"The financial sector is fairly strong right now," said Rick Cobb, executive vice president of Challenger, Gray & Christmas. "Banks are doing well, TARP has been paid back, and it's a relatively stable economy with lots of positive signs."
The sector announced 1,525 planned layoffs in March, a substantial decrease from February, which saw 2,860 cuts. The most cuts, 522, took place in California, while the second highest number, 491, took place in Illinois, according to an analysis by FINS and Challenger, Gray & Christmas. Last month, the most planned finance layoffs took place in New York and Delaware.
Layoffs in finance occurred mostly because of economic conditions, which were responsible for 784 cuts. Mergers and acquisitions accounted for 491 cuts and restructuring for 250.
Cobb believes that the finance sector will anticipate more growth over the next few months, with the possible exception of the realty market, both residential and commercial. That area in particular could see more reductions.
According to the report, the first quarter of 2011 saw the lowest number of planned job cuts across all industries since the first quarter of 1995.
Write to Julie Steinberg