 "Why US saw worst February for layoffs since 2009")
US president Joe Biden may have claimed that the state of the union is ‘strong and getting stronger,’ the data shows that people continue to lose jobs.
A new report released Thursday showed that layoffs rose to the highest level in 11 months.
The report, by outplacement firm Challenger, Gray & Christmas, said job cut announcements reached 84,638 in February – the worst for the month of February since 2009.
But what do we know about the report? And why is this happening?
Let’s take a closer look:
US layoff announcements rose three per cent last month to the highest level in 11 months as automation-related restructuring continues to take a toll, a report released on Thursday said.
Job cut announcements reached 84,638 in February – the highest since last March 2023.
That figure was at 82,307 in January.
While it was the highest total for the month of February since 2009, on a year-to-date basis cuts so far in 2024 are down 7.6 per cent from the same period last year.
According to Seeking Alpha, firms have said they will cut 166,945 jobs this year.
The technology sector, which witnessed 34,000 job cuts in 141 firms so far this year, according to tracking website Layoffs.fyi, saw some of the biggest job cuts in February, along with transportation and services.
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More ShortsSeeking Alpha reported that the tech sector saw 12,412 job cuts in February alone.
However, though the tech sector leads all industries in job cuts so far this year, layoffs are still down by 55 per cent year to date compared with the same period in 2023.
For the finance sector, cuts are up 56 per cent over last year.
Financial firms witnessed 26,856 job eliminations through February, as per Seeking Alpha.
Transportation firms have announced 14,148 layoffs this year.
That figure was at 2,059 announced in the same period last year.
According to Forbes, the manufacturing sector has witnessed 7,806 jobs, while; energy companies have cut 4,486 jobs and the education sector has cut 6,336 jobs.
Media companies have seen 4,685 jobs lost this year.
That figure is actually 52 per cent lower than this time in 2023.
However, broadcast, digital and print media saw 1,754 layoffs in January and February.
That’s a 94 per cent increase in job cuts over the same period last year, as per Forbes.
Which companies have made cuts?
Behemoths like Amazon, Google and Microsoft have made cuts.
Amazon’s job cuts include less than 5 per cent of employees at Buy with Prime unit, 5 per cent at audiobook and podcast division Audible, several hundred in streaming and studio operations, 35 per cent at streaming unit Twitch and a few hundred at healthcare units One Medical and Amazon Pharmacy.
Layoffs at Alphabet include dozens at division for developing new technology X Lab, hundreds in advertising sales team, hundreds across teams, including hardware team responsible for Pixel, Nest and Fitbit, and a majority in augmented reality team.
Microsoft is cutting around 1,900 jobs at gaming divisions Activision Blizzard and Xbox. IBM plans to lay off some employees in 2024, but will hire more for AI-centered roles.
Videogame software provider Unity Software to cut about 25 per cent of workforce, or 1,800 jobs. DocuSign plans to reduce workforce by about 6 per cent, or 400 employees, with a majority in its sales and marketing organisations. Snap plans to cut around 528 jobs, or 10 per cent of its global workforce.
Salesforce is laying off about 700 employees, or roughly 1 per cent of its global workforce. Network giant Cisco is planning to restructure its business which will include laying off thousands of employees.
Autonomous vehicle technology company Aurora Innovation lays off 3 per cent of workforce. Canada’s BlackBerry plans more layoffs, in addition to about 200 job cuts in the prior quarter.
Satellite radio company SiriusXM plans to reduce workforce by about 3 per cent, or about 160 roles. Bumble is set to eliminate 350 jobs, or about 30 per cent of its workforce.
When it comes to media, Walt Disney’s Pixar Animation Studios is set to cut jobs as the studio has completed production on some shows.
Comcast-owned British media group Sky plans to cut about 1,000 jobs across its businesses this year. The Los Angeles Times plans to lay off 94 journalists.
Paramount Global is planning to conduct unspecified number of layoffs. Business Insider plans to lay off around eight per cent of its staff. Bell Canada plans to slash 4,800 jobs.
In financial services, PayPal Holdings is planning to cut about 2,500 jobs, or 9 per cent of its global workforce this year. Payments firm Block Inc has started to cut unspecified jobs. Citigroup is planning to reduce its headcount by 20,000 people over the next two years.
Investment banking giant Morgan Stanley is planning to cut hundreds of jobs in its wealth management unit, a person familiar with the matter told Reuters, adding that the cuts will impact less than 1 per cent of the division’s employees. Exchange operator Nasdaq plans to slash hundreds of jobs as it integrates fintech firm Adenza into its business. Asset manager BlackRock is set to cut about 3 per cent of its workforce, but expects larger headcount by end-2024.
In consumer and retail, cosmetics giant Estee Lauder plans to cut 3 per cent to 5 per cent of its global workforce. Wayfair plans to lay off 1,650 employees, or about 13 per cent of its workforce.
US department store chain Macy’s is cutting 2,350 jobs, closing five stores. Levi Strauss & Co is planning to slash 10 per cent-15 per cent of global corporate jobs. Hershey’s restructuring plan will impact less than 5 per cent of its workforce. Nike will cut about 2 per cent of its total workforce, or more than 1,600 jobs, as the sportswear giant looks to cut costs after flagging weaker profits this year.
Health company Novavax is cutting about 12 per cent of workforce.
Defence contractor Lockheed Martin is planning to cut 1 per cent of its jobs. The United Parcel Service plans to cut 12,000 jobs to cut costs.
US miner Piedmont Lithium cuts 27 per cent of workforce in cost-cutting plan. Canadian oil and gas pipeline firm TC Energy has laid off some of its workers as part of a previously announced plan to integrate its natural gas pipeline units. Canada-based crude pipeline operator Enbridge said it would reduce its workforce by 650 jobs, or 5 per cent, in a bid to cut costs.
Why is this happening?
Restructuring efforts and plant, unit or store closures were most frequently cited as reasons for layoffs, Challenger said.
Companies cited “restructuring” as the major reason for the job losses so far this year (the reason was cited for 37,659 cuts); store, unit or plant closures (26,272) and cost-cutting (20,890).
But many companies appear to be cutting jobs due to AI and automation.
Andrew Challenger, the firm’s senior vice president, said firms may be masking cuts associated with artificial intelligence under other labels.
“In light of the backlash some companies have faced for directly attributing job cuts to artificial intelligence, they appear to be framing this shift as a ‘technological update’ rather than an outright substitution of human roles with AI,” said Challenger.
“In truth, companies are also implementing robotics and automation in addition to AI. It’s worth noting that last year alone, AI was directly cited in 4,247 job reductions, suggesting a growing impact on companies’ workforces.”
“As we navigate the start of 2024, we’re witnessing a persistent wave of layoffs. Businesses are aggressively slashing costs and embracing technological innovations, actions that are significantly reshaping staffing needs,” Challenger told Seeking Alpha.
Job cuts in tech and retail follow a massive ramp-up in hiring during the COVID-19 pandemic — when people spent more time and money online. Now, many companies are reducing headcounts to help lower costs.
The high profile job cuts seem to arrive steadily, but the companies that went on major hiring sprees, mostly big tech, are still much bigger than they were a few years ago, before they began bulking up their workforces.
With inputs from agencies
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