Putting layoffs in perspective: Back to 2021 levels
Spotify, Wayfair and Alphabet announced major layoffs this week — and there’s likely more where that came from.
Even employees at Google — once known as the retirement home of tech — fear for their jobs.
But one company’s loss is the rest of the industry’s gain…
And the staffing levels aren’t that much lower if you put them in perspective.
- How’d it happen? During the pandemic, tech companies overestimated growth and went overboard on hiring.
- Perspective: Layoffs at Meta and Salesforce will bring their employment levels back to 2021-end levels.
Despite the cutbacks, the US unemployment rate is still at a low of 3.50% — far below the long-term 5.73% average.
Why is the labor market still so “strong”? There are a few explanations, depending on the industry:
- Tech: Workers are still in demand. GlassDoor’s Chief Economist says those “laid off early in the cycle have found new jobs relatively quickly.”
- Construction: Despite a weak real estate market, Amberwave Partners’ Steve Miran suspects that homebuilders are keeping employees, expecting spending from the infrastructure bill to kick in this year.
- Retail and hospitality: Both sectors have struggled to hire since COVID started. A Korn Ferry US report showed 94% of retailers having difficulty filling vacant spots.