The number of announced layoffs by U.S.-based companies surged in September from the previous month, and Hewlett-Packard’s outsized cuts raise a red flag, John Challenger, CEO of Challenger, Gray & Christmas, told CNBC’s “Squawk Box” on Thursday.
“It’s interesting that we are beginning to see some big layoff announcements this year,” he said. “One of the things you start to see as you get near the end of a period of expansion, but before it really turns, is you start to see major layoffs occurring, big mega-layoffs like we’re seeing now.”
U.S.-headquartered companies put 58,877 jobs on the chopping block last month, up 43 percent from just more than 41,000 in August and the third highest monthly total this year, Challenger’s global outplacement firm reported.
Challenger said the computer sector led all other industries in layoffs in September. Hewlett-Packard accounted for nearly all of the 32,500 reductions.
Last month, Hewlett-Packard announced it would cut 25,000 to 30,000 positions as part of its restructuring, which will split the company into one firm focused on enterprise services and one dedicated to its legacy hardware business.
Read MoreLayoffs needed because market is changing so rapidly: HP’s Whitman
Challenger said the HP cuts were not necessarily an indicator that overall layoffs would continue to increase substantially month to month. Instead, he said, they may be a sign that companies having a more difficult time will begin shedding workers.
The first day of October saw further cuts from big companies.
Reuters reported that Wal-Mart is planning to lay off hundreds of people at its headquarters in Arkansas as part of the retail giant’s efforts to pare costs. Fewer than 500 employees are expected to lose their jobs, and an announcement could be made as early as Friday, according to one of sources told Reuters.
ConAgra announced it is cutting about 1,500 jobs, or approximately 30 percent of its global, office-based workforce, and moving its headquarters to Chicago from Omaha, Nebraska. The packaged food company said Thursday its plans should result in about $200 million in savings, with most of that realized in fiscal 2018.
On Tuesday, Chesapeake Energy, the nation’s second largest producer of natural gas, announced it would lay off about 15 percent of its workforce after it reported a $4 billion quarterly loss in August.
The energy industry remained the biggest job-cutting sector for the year, with 72,708 cuts announced since January, Challenger said.
The Challenger report comes a day before the Labor Department’s closely watched monthly employment data for September. On Wednesday, ADP reported that private companies topped expectations for job creation in September, adding 200,000 new positions.
The September reductions in the Challenger report pushed the layoff count in the third quarter to 205,759, making it the worst quarter for job cuts in six years. Year to date, employers have announced plans to hand out 493,431 pink slips, more than the full-year total of 483,171 in 2014.