In yet another sign that the economy is teetering on the brink of a recession that has a non-zero probability of turning into a depression, mainstream American companies are delivering a new wave of layoffs.
On March 23, Reuters broke the news that retail monolith Walmart was laying off hundreds of employees at five different distribution centers “due to a reduction or elimination in evening and weekend shifts” as confirmed by a company spokesperson.
The move comes despite Q4 and FY 22 corporate earnings results that were positive. Nonetheless, the biggest retailers such as Walmart, Bestbuy, Amazon and Target were known to be sitting on a glut of excess inventory as late as Q3 2022 spurred on by supply chain management necessities, rising consumer debt, and depleted savings in the lower social classes.
Although several hundred jobs at five distribution sites may not sound significant, Reuters put overall industry figures into light, paraphrasing a report from an analyst firm, “Fears of an upcoming recession have already led retailers to announce 17,456 job cuts so far in 2023, compared with 761 in the same period last year.”
A statement issued by Walmart tacitly admitted the downsizing was preparation for changing economic conditions described as to help the company “better prepare for the future needs of customers.”
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But the Reuters exclusive alludes to a reality wherein the downsizing may also be linked to the automation revolution, wherein machines are replacing human jobs.
The article stated Walmart “has been investing heavily in automation over the past few years, partnering with companies such as Knapp to help it cut down the number of steps it takes employees to process e-commerce orders to five from 12.”
Walmart stated that the cut distribution center employees would receive 90 days pay and be eligible to work inside retail stores.
Fellow online retail giant Amazon likewise announced on March 20 that more than 9,000 jobs would be cut. In a company blog post, CEO Andy Jassy said that the demolition would occur primarily in the Amazon Web Services and Twitch streaming service branches.
“Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount,” Jassy stated.
The cuts come in addition to the elimination of 18,000 employees announced in January.
CEO for Twitch Dan Clancy confirmed his branch would lose roughly 400 of its 1,100 employees in a same day blog post, stating, “Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations.”
At the beginning of the month, SiriusXM Radio made the announcement that it would part with 8 percent of its staff, approximately 475 people, citing “investments we are making in the business this year” and “today’s uncertain economic environment” as a predicate for reducing labor costs.
But perhaps simultaneously the most ironic and ominous layoff announcement came on March 22 from no less than job hunting website Indeed, which stated that 2,200 people, amounting to roughly 15 percent of the company, would be laid off.
CEO Chris Hyams said in the announcement, “It is clear the job market will continue to cool after the recent post-COVID boom.”
“Last quarter, US total job openings were down 3.5% year over year, while sponsored job volumes were down 33%,” Hyams added. “In the US, we are expecting job openings will likely decrease to pre-pandemic levels of about 7.5 million, or even lower over the next two to three years.”
Hyams stated that Indeed “is simply too big for what lies ahead,” adding that “the revenue trends are undeniable.”
Indeed’s capitulation came just days after reports that the job seeker market was plagued by “Ghost Job” postings, a trend wherein companies post ads they aren’t actually hiring for to collect resumes for future considerations and to give staff and investors the impression things are going better than they are, began to make headlines.
Industry peer Glassdoor likewise announced on March 22 that it would be severing 140 employees, also amounting to 15 percent of its staff. The firm likewise lamented that U.S.-based jobs postings were down 33 percent annually.
“It has become increasingly clear that this is just the beginning of a broader economic slowdown, as the job market cools after the post-COVID boom,” said CEO Christian Sutherland-Wong in the missive.
The situation is so endemic that Forbes has launched a Layoff Tracker to amalgamate the news, noting that distressed retail chain Bed Bath and Beyond is also cutting another nearly 1,000 employees based on new disclosures.
Bed Bath’s move comes in addition to earlier announcement that the chain, which is teetering on the edge of insolvency, would completely exit the Canadian market along with its profitable Buy Buy Baby spinoff.
The Forbes tracker also states that Tyson Foods is not only laying off almost 1,700 employees, but closing plants in Arkansas and Virginia. The outlet stated the move came after financial reports “showed operating income from its chicken business was less than half of what it was last year.”
But as with all things, where there’s a loser, there is also a winner.
Nikkei Asia reported on March 24 that the early rounds of cascading U.S. layoffs had become a boon for Japan’s IT firms who are normally burdened with “less competitive pay levels.”
“Against this backdrop, companies such as Fujitsu and Toshiba Tec are seizing on the opportunity to bring in former Big Tech engineers,” the outlet stated.
Nikkei said that Toshiba was, to the contrary, looking to expand its engineering workforce by 30 percent by 2025.
“Foreign engineers — many from India and China — working in the U.S. have to leave if they are laid off, unless they quickly find new employers,” Nikkei pointed out.
On March 22, the Twitter account for the U.S. Citizenship and Immigration Services told the public that B-1 and B-2 Visa holders, issued for short term business and tourism travel, were now permitted to attend job interviews on American soil.
However, the USCIS made it clear that the relaxation in interview activities was still eclipsed by tight labor controls, “Before beginning any new employment, a petition and request for a change of status from B-1 or B-2 to an employment-authorized status must be approved, and the new status must take effect.”
The nature of the situation was arguably well encapsulated in a March 24 Bloomberg article chronicling the fate of a 39-year-old Amazon employee who “was making more money than he ever had in his life working from home in Bozeman, Montana.”
The man worked as a “technical recruiter” and gave up his career in the U.S. Navy for the position. Now, the man has “found himself stacking boxes at the local Lowe’s.”
The article focused on what Bloomberg coined “Zoom Towns,” such as Bozeman, which “boomed during the pandemic, offering remote knowledge workers small-town charms and a chance to make their big-city paychecks go far.”
Another case Bloomberg recorded was that of a family of four who had, while living in Austin, Texas, been renting an apartment on a $75,000 per year salary as “an independent creative director, working on design campaigns for large consumer brands.”
The family moved to Bloomington, Indiana, where they were able to acquire a four bedroom and four bathroom home for only $450,000.
“But by October, [the husband’s] remote work had dried up as companies cut budgets for marketing and advertising in response to growing economic uncertainty,” Bloomberg stated.
Unfortunately for the family, because Bloomington isn’t a metropolis hub like Austin was, finding local work as a creative director proved unsuccessful.
Fortunately for the family, the husband was able to get a local position as a marketing specialist after some local networking was successful. But the change wasn’t without its consequences. The family took a one-third haircut on their income and now has to float their mortgage on only $50,000 per year.