Topline
More than 136,000 people lost their jobs in major layoffs at U.S. companies over the fiscal quarter ending this week, more than the prior two quarters combined, as tech and manufacturing layoffs, led by Amazon, Google, Meta and Microsoft, surged, according to Forbes’ layoff tracker.
Meta conducted one of the biggest rounds of layoffs this year, cutting roughly 10,000 positions.
Key Facts
Layoffs through the first three months of 2023 have already exceeded layoffs in the last six months of 2022, when more than 125,000 employees lost their jobs in major U.S. layoffs as companies started to fear high inflation and multiple rounds of interest rate hikes could throw the economy into recession.
Just this week, electric automaker Lucid cut 1,300 employees, while videogame maker Electric Arts cut 800 employees, and billionaire Richard Branson’s struggling aerospace company Virgin Orbit laid off 675 (roughly 85% of its staff).
More than 74,000 of the employees who lost their jobs in the current fiscal quarter were laid off in January—the most employees cut in a one-month period since Forbes started tracking layoffs last summer (Forbes’ tracker documents layoffs affecting at least 100 employees).
The biggest round of cuts that month came at Google, with CEO Sundar Pichai announcing plans on January 20 to cut 12,000 jobs, after the company “hired for a different economic reality than the one we face today.”
Just two days earlier, Microsoft announced it would cut 10,000 employees as the tech giant attempted to embrace “times of significant change.”
Some of the biggest layoffs so far this year came that month: Salesforce cut 7,900, IBM cut 3,900, Goldman Sachs cut 3,200 and Amazon reduced its headcount by another 8,000 employees in its second round of cuts since November.
More than 24,000 positions were slashed in major U.S. cuts in February, including at Dell Technologies, which reduced its head count by 6,650 employees amid “uncertain” market decisions,” COO Jeff Clarke told employees in a memo obtained by Bloomberg.
Also in February: Boeing laid off 2,000 workers, Yahoo cut 1,600, Twilio cut 1,500 and Zoom cut 1,300.
Nearly 35,000 more jobs were eliminated in March, led by cuts at Facebook and Instagram parent company Meta, which unveiled plans to eliminate 10,000 jobs to “improve our financial performance in a difficult environment,” while Amazon cut 9,000 employees in another round of cuts and Disney slashed 7,000 positions.
Surprising Fact
Even as U.S. companies continue to reduce their head counts in the first three months of 2023, the unemployment dropped to a near 54-year low of 3.6% last month, according to data released two weeks ago by the federal Bureau of Labor Statistics, which found total employment increased in the U.S. by 311,000 positions from January to February. Employment increased by a whopping 500,000 positions in January, more than doubling economists’ predictions, led by hiring in the healthcare and hospitality industries. Navy Federal Credit Union economist Robert Frick lauded the hiring as “robust,” particularly in leisure and hospitality, retail, government and health care industries.
Key Background
Just over 120 U.S. companies conducted major layoffs last year, including banks, manufacturing companies, e-commerce sites and tech startups, according to Forbes’ tracker, after inflation hit a 40-year high, home sales collapsed and the Federal Reserve, in an attempt to curb soaring inflation, implemented aggressive interest rate hikes. The biggest round of layoffs last year was at Meta, which unveiled plans last November to cut 11,000 employees, before re-topping its staff reduction by another 10,000 positions earlier this month. So far this year, another 93 U.S. companies have conducted major layoffs, according to Forbes’ tracker.
Tangent
Analysts have pointed to an economic theory called the Phillips Curve to explain the recent increase in employment amid high inflation, as well as the risk of higher unemployment if the Federal Reserve continues to implement rate hikes. According to the theory, high employment means people have more spending power, increasing demand for goods and leading to higher prices. The relationship between unemployment and inflation was central to a heated debate earlier this month between Federal Reserve Chair Jerome Powell and Sen. Elizabeth Warren (D-Mass.), who berated Powell for suggesting additional interest rate hikes to curb inflation, arguing it would lead to a reduction of roughly 2 million U.S. jobs. Powell, in response, claimed high inflation is “hurting the working people of this country badly,” and that the Fed has been “taking the only measures we have to bring inflation down.”
Further Reading
2023 Layoff Tracker: Disney Starts Cutting 7,000 Employees (Forbes)
125,000 Laid Off In Major Cuts As Recession Fears Spiked, According To Forbes Tracker (Forbes)
More Than 81,000 Employees Laid Off In Major U.S. Layoffs In January (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2023/03/31/136000-laid-off-in-major-us-job-cuts-this-quarter-more-than-prior-two-quarters-combined/