US companies’ layoffs in Jan Feb, hits highest since 2009
- EP News Service
- Mar 10, 2023
According to a report by employment firm Challenger, Gray & Christmas Inc, retrenchment and layoffs of employees by US companies in January and February have touched the highest since 2009 mostly led by the technology sector.
The report US-based employers announced 77,770 job cuts in February, which was down by 24% from the 102,943 cuts announced in January and the tech sector accounted for more than a third of the over 180,000 job cuts in this period.
The February layoffs at 77,770 were more than five times higher than the 15,245 job cuts announced a year earlier, the report from the employment firm said, adding that tech companies from Microsoft Corp and Google parent Alphabet to PayPal Holdings have cut thousands of jobs this year to curb spending and protect margins amid an uncertain economic outlook.
Andrew Challenger, the senior vice president of the firm quoted in the report, "Right now, the overwhelming bulk of cuts are occurring in technology. Retail and financial are also cutting right now as consumer spending matches economic conditions."
According to James Tierney, the chief investment officer of asset management firm Alliance Bernstein quoting to newswires, many companies laying off people are welcome to investors.
This sort of right-sizing the cost structure and rationalising growth are being rewarded in the marketplace, shares of Alphabet, Microsoft, Amazon.com and Meta Platforms have gained between 6 and 54 per cent so far this year after falling between 29 and 64 per cent in 2022.
The report said although the overwhelming bulk of cuts is occurring in technology other sectors like retail, media and finance sectors are also cutting jobs as consumer spending matches economic conditions.
The report said that retailers announced 17,456 job cuts so far this year, up 2,194% from the 761 job cuts announced in the sector during the same period last year. "Financial firms have cut 17,235, 1,401% higher than the 1,148 cuts announced in January and February last year," the report said. It added that in January and February this year, the fintech sector announced 4,675 job cuts, 45% of the 10,476 the industry cut in all of 2022.
The healthcare sector, which includes hospitals and healthcare products manufacturers, announced the second most number of job cuts in February at 9,749 compared to 8,928 cuts during the same month last year. Andrew Challenger said that while many hospitals are still struggling to retain and attract staff, others are cutting costs as economic conditions continue to soften. When it comes to healthcare product manufacturers, Challenger said that such establishments are dealing with increasing costs of doing business and cutting back staff.
To date in these two months, the media industry has announced to cut of 9,738 jobs, compared to 3,774 cuts announced last year. Nearly 906 of those occurred in digital, print, and broadcast News, which Challenger tracks as a subset of Media, 546 of which occurred in February. This is up 353% from the 200 News cuts which occurred through February 2022 the report said.
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