According to the Challenger Gray monthly report of layoffs, the auto industry was hit hard last month. Layoffs rose to 10,198 from 1,062 in the same month last year.
Overall, layoffs for the month also surged. Across all industries, the figure was 32,517, up from 20,476 in June 2021.
The firm’s comment about the industry was: “In June, the Automotive sector announced the most cuts with 10,198, bringing the year-to-date total to 15,578, a 155% increase from the 6,111 cuts announced through June last year. The industry, plagued by supply chain issues, semiconductor shortages, and now surging gas prices, is finding its footing as it pivots amid increased demand for electric vehicles.”
The car industry had been one of employment stability. That changed as car companies were hit with supply chain problems. This shut down some assembly lines. Shortages of microchips used in many cars may not improve until well into next year.
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Car sales could be dented for most of 2023. Car companies have to adjust their expenses.
The other side of employment in the industry is the move into electric vehicles. This should, in theory, create new jobs, but the change remains in its infancy.
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The odds of a recession have risen sharply in the past quarter. The car business is almost always hit hard by a strong economic downturn. That will not change. Employment in the industry probably will continue to weaken.
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