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.