Telecommunications companies cut fewer than 1,500 jobs in January, but that number is expected to soar in coming months. "Merger activity is starting to accelerate in many industries," said John Challenger, chief executive of the outplacement firm. "On Monday alone, there were three major deals announced, including the mega-merger between SBC and AT and T, which is likely to result in significant job cuts." Mergers and acquisition activity was the second-leading cause of layoffs in January, behind cost-cutting. The Challenger data are not seasonally adjusted. Since January is typically a heavy job-cutting month, the fact that job cuts declined from December "is a sign of job market improvement," Challenger said.
The Challenger survey covers only a small portion of job losses; most small businesses do not announce job reductions. The announced reductions can occur immediately or over time.