By Freddie Mooche

(AXcess News) Washington - Government layoffs accounted for the bulk of job cuts in March, according to the latest Challenger, Gray & Christmas (CGC) report.  The outplacement consulting firm forecast 67,611 job cuts in March, a 61% increase over the prior month's forecast.

The outplacement consultancy says March job cut figures were 'significant' in relation to the February total of 42,090, which was the lowest in nearly four years, when in July 2006 employers cut 31,178 jobs.  Yet CGC says the recession had caused the greatest number of job cuts in the US economy in the first quarter of last year so that in comparison to the first three months of 2010, payroll figures are much milder in the number of employers who have shed jobs.  Much of the resulting layoffs this year were caused by a weak economy catching up with the job market with federal, state and local government reeling from the effects of the downturn in the US economy.

"Most industries have seen sharp declines in the number of layoffs this year, compared to the beginning of last year. The first quarter of 2009 really marked the peak of downsizing for this recession. Unfortunately, many people are still jobless and many businesses still shuttered. This combination is having a significant negative impact on state and local tax revenues and, in turn, leading to continued downsizing in this sector," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

CGC reports that:

March job cuts were dominated by planned reductions on government payrolls, which totaled 50,604 or nearly 75 percent of all planned layoffs announced during the month. The majority of the government cuts came from the United States Postal Service, which plans to reduce its headcount by 30,000 workers this year. Since USPS is not permitted to lay off employees, it will achieve the reductions through retirements and attrition.

The other 20,604 public-sector job cuts came from state and local agencies, including many school districts, which all continue to suffer massive budget shortfalls. Year to date, government employers have announced 61,800 job cuts, or about one-third of all announced layoffs.

Yet Challenger says its not all that bleak in the government job sector, pointing out that of the $182.5 billion earmarked for states from the recovery act, only $54.6 billion has been used - "though even the more nimble state and local agencies are hampered by bureaucracies that slow the planning, approval and implementation of the types of projects that will create jobs," he added.

Trailing well behind the government sector, the second-ranked pharmaceutical industry has announced 26,165 job cuts this year, which is 46 percent fewer than the 48,885 pharmaceutical jobs cut in the first quarter of 2009.

Employers in the retail sector have announced the third largest number of job cuts this year with 20,368. Most of those cuts occurred in January. The Q1 total is down 73 percent from last year, when retailers announced 76,548 first-quarter job cuts.