Retailers' troubles hitting U.S. workforce
The retail industry's woes -- exemplified by bankruptcies like Toys "R" Us and a string of store closings -- are translating into lost paychecks for tens of thousands of U.S. workers.
Retail tops all sectors in job cuts this year, with more than 64,000 so far -- that's 28 percent more than the roughly 50,000 retail jobs lost during the same period last year, according to a report Thursday by Challenger, Gray and Christmas. The toll includes nearly 7,900 retail workers who lost their jobs in April.
Retailers have announced 2,460 store closures so far this year, following 9,241 store closures in 2017, according to the outplacement firm's tracking.
Some 33,000 workers lost their jobs as bankrupt retailer Toys "R" Us started shutting down its 735 U.S. stores in March, the largest layoff in the retail sector since at least 2015 and comparable to the more than 30,000 people who lost their jobs when Circuit City went out of business in 2009.
"Retail continues to lead sectors in terms of where the most job cuts are, which has been going on three years," said Andy Challenger, vice president at Challenger, in an interview. "There's been a multi-year change for the retail industry as we continue to shift away from brick-and-mortar stores to e-commerce and online sales."
While Amazon and online shopping are surely factors in the decline of the American mall and physical brick-and-mortar stores, some of the fallen chains were also crushed by debt, often from leveraged buyouts led by private-equity firms. Toys "R" Us, for instance, had $5 billion in debt and declared bankruptcy in September after struggling to refinance only $400 million of it.
But the hiring news isn't all gloomy on the retail front. The industry is seeing significant growth in new hires as companies expand backroom operations and invest in shipping, as well as handling and logistic centers, Challenger said.
The unfortunate part of the trend is, Challenger relayed, "in closing brick-and-mortar stores, the skills of cashiers and sales people are not transferable to the warehouse."
