Home / News / World /  US layoffs hit two-year high in Jan 2023, experts predict 'more in store'

The employment sector in the United States have seen two contradictory figures in the December 2022 to January 2023 period, wherein the US economy reported an 11 million rise in job opening in December, while on the other hand, layoff in the US also hit a more than two-year high in January 2023. 

Big techs in their effort to build a strategic resistance to an assumed impending recession has indulged in rampant and extremely fast-paced layoffs impacting a whopping 102,943 workers in the US job sector, according to a report published by Layoffs.fyi. 

The report has further informed that the numbers of layoff have marked as a more than two fold jump from December 2022 and a an almost five year rise than the numbers recorded in 2021. The report was filed by employment firm Challenger, Gray & Christmas Inc.

Companies like Google, Microsoft, Amazon, Goldman Sachs, Meta cut thousands of jobs to strengthen and retain the functioning of their ‘core structure’. In their bid to said through the demand downturn, the companies layoff thousands of employees. 

The massive layoff comes as consumer and corporate spending shrinks due to high inflation and rising interest rates.

Several experts have attributed the drastic measures to the surging demand induced large scale hiring the companies had undertaken during the Covid pandemic lockdown. 

The report has clarified that the need to correct the pandemic time excess have been most evident in tech companies followed by retailers. The report says tech sector slashed 41,829 jobs last month, the highest across industries.

Retail followed suit by slashing 13,000 positions in January 2023. Financial firm also jumped ship and terminated 10,603 jobs last month, up from 696 roles a year earlier.

Interestingly, it should be noted that for 18 straight months, employers have posted at least 10 million openings — a level never reached before 2021 in Labor Department data going back to 2000. The number of openings in December meant that there were about two vacancies for every unemployed American.

On Wednesday, AP reported that employers in US hired 6.17 million workers in December, up from 6.03 million in November. US job market has seen a significant turmoil with initial wave of great resignation which cooled down by December 2022. 

In January 2022, tech layoffs were marked at 510 as against 84,049 in January 2023. Further tech layoffs in Covid-19 increased from 9628 in the Q1 of 2020 to 84,374 in Q1 of 2023. 

Apart from that, Retail saw the highest layoffs in 2022, clocking an alarming 20,014 layoffs in 2022 as against 8,002 in 2020. This was followed by consumer sector in US economy that slashed 19,856 jobs in 2022 as against 6,063 in 2020. 

According to the report, Google still takes the crown for the highest layoffs, terminating the employment of 12,000 employees from their San Francisco office, followed by Meta (11,000), Microsoft (10,000) and Amazon (10,000). 

While these are the numbers for Amazon layoff in 2022, the e-retail platform slashed another 8,000 jobs in 2023. 

Meanwhile, Philips also cut jobs in 2022 (4000 employees) and again in 2023 (6,000 employees). 

Other companies like Salesforce (8,000), Booking.com (4,375) joined the league of companies that laid off employees in huge numbers. 

 Indian online education platform Byju's also saw shedding of jobs twice in two moths, wherein, in December 2022 it lay off 2500 employees and in February 2023 the company laid off another 1500 employees. 

The list prepared by Challenger, Gray & Christmas Inc has listed 2148 companies that laid off employees ahead of a probable recession.

Combating inflation that last year hit a four-decade high, the Federal Reserve has hiked its benchmark rate seven times since March and is expected to announce another rate hike later.

Many economists believe the Fed rate hikes will slow the economy enough to cause a recession later this year.

With the Federal Reserve expected to continue on its rate-hiking path to stamp down inflation that is still on the higher side after several rounds of rate increases, analysts said more layoffs could be in store for US companies.

(With agency inputs)


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