The United States' job market has remained strong despite challenges facing the economy. In May, the country added 339,000 jobs, bringing the unemployment rate to 3.7 percent. However, there have been a growing number of large-scale layoffs in recent months. The tech and media sectors have been hit particularly hard, with companies like Microsoft, Amazon, Salesforce, HP, Google, and Facebook all announcing plans to cut thousands of workers. Other industries are also feeling the pinch, with Goldman Sachs, Ford, 3M, Hasbro, Boeing, Disney, and Tyson all making cutbacks. Inflation remains high, which is causing concern for the Federal Reserve as it tries to combat it by raising interest rates. This has led to some observers attributing the turmoil in the banking sector to the Fed's actions. Many experts believe that a mild recession is likely. Sectors such as technology firms and Wall Street banks, which are more sensitive to rising borrowing costs, have seen some of the most significant layoffs.
According to Aaron Terrazas, the chief economist at Glassdoor, there are three types of companies that are currently cutting staff. The first are those whose debt is becoming more expensive due to the Federal Reserve's tightening. The second are those who are uncertain about the economic outlook, and the third are those using the economic climate as an excuse to cut employees they would have let go anyway. Terrazas notes that businesses coming out of the pandemic must deal with various risks such as geopolitics, employee retention, investment, and the supply chain. Business leaders have been scarred by recent risk events and are planning conservatively. As a result, there have been significant layoffs across various industries..
lphabet, the parent company of Google, is set to cut around 12,000 jobs, equating to approximately 6% of its workforce. CEO Sundar Pichai stated that the cuts will be made across the company following a thorough review. Despite experiencing significant growth over the past two years, demand has declined as in-person life returns and interest rates increase, leading to higher borrowing costs. Pichai acknowledged that the company had hired to meet previous demand but that the current economic reality is vastly different. Meanwhile, Amazon announced plans to cut around 18,000 corporate jobs in November, citing an uncertain economy. The reduction marks the end of a decade of near-constant expansion, with over 1.5 million employees at the end of September. Facebook and Instagram's parent company, Meta, also announced plans to cut 11,000 jobs in November, with a further 10,000 job cuts announced in March due to declining revenue from online shopping and advertising competition.
Numerous corporations, including Microsoft, Salesforce, Twitter, Disney, News Corp, HP, and Dell, have announced plans to lay off employees as part of cost-cutting measures. Microsoft plans to lay off less than 5% of its workforce, while Salesforce is shedding 10% of its employees, which could affect nearly 8,000 people. Twitter has laid off roughly half of its 7,500 workers since being acquired by Elon Musk in October 2022. Disney is cutting around 7,000 jobs to save $5.5 billion, while News Corp is reducing its workforce by 5%, or about 1,250 jobs. HP plans to trim 4,000 to 6,000 workers by the end of 2025, and Dell is shedding about 5% of its workforce, or around 6,650 positions. IBM plans to cut around 3,900 positions, or about 1.5% of its global workforce.
SAP, the European software giant, plans to cut 2,800 employees, which amounts to 2.5% of its workforce. The company cited a “targeted restructuring” and plans to “strengthen its core business and improve overall process efficiency” as the reasons for the layoffs. Twilio, the San Francisco-based communications technology firm, announced that it would lay off 1,500 employees, which is 17% of its workforce. The cuts are part of a broader restructuring plan designed to shift the company towards greater profitability. Boeing plans to shed approximately 2,000 non-unionized jobs in its human resources and finance divisions. However, the company plans to hire about 10,000 people throughout 2023. Ford has let go of about 3,000 white-collar contract employees in the United States, Canada, and India. The automaker announced plans to cut 3,800 jobs in Europe while expanding battery production operations in Michigan as part of a broader transition toward electric vehicles. Goldman Sachs started shedding as many as 3,200 jobs in early January following a slump in dealmaking in 2022. The investment bank’s cuts will go beyond a ritual year-end culling of underperformers and will still leave its headcount higher than it was going into the pandemic. 3M said it would cut 2,500 manufacturing jobs after the company reported rapid declines in its consumer-facing markets, including slowing demand for disposable respirators and covid-related disruptions in China. Morgan Stanley trimmed about 1,600 workers in December 2022, which is 2% of its workforce. The cuts appeared to be part of a tradition among Morgan Stanley and its peers to cut a percentage of low performers at year’s end.
Media companies and other industries are laying off staff due to economic uncertainty and a softening advertising climate. BuzzFeed CEO Jonah Peretti announced that the company will lay off 15% of its staff and shutter BuzzFeed News. CNN, Gannett, Paramount Global, Disney, Vox Media, The Washington Post, and the Los Angeles Times have also announced layoffs. In January, Coinbase eliminated 950 jobs, while Spotify cut 6% of its workforce and an additional 200 workers in June. Hasbro announced that it would eliminate 15% of its global workforce, and DocuSign plans to lay off about 10% of its staff. Dow will reduce its workforce by 2,000, or about 5.5% of its workforce.