Layoffs Increase Nearly 400% As Employers Battle Volatile Economy

Between the first quarter of 2022 and the first quarter of 2023, layoffs by US-based employers have risen by almost 400%, with increasing economic uncertainty and a drive towards cost efficiency being cited as the primary reasons for companies shedding a large number of staff. According to a report from Challenger, Gray & Christmas – an executive outplacement firm – technology companies account for 102,000 of the 270,000 positions cut, with the banking, manufacturing, and media sectors also announcing significant job losses. Overall, layoffs in 2023 are expected to exceed those experienced at the height of the dot-com bubble in 2001.

Investors have urged the layoffs, with inflated payrolls and falling consumer demand being blamed for lacklustre profits. Amazon CEO, Andy Jassy, referenced an “uncertain economy” as a key factor in the downsizing of his company’s payroll, even though the overall American job market continues to be robust with unemployment at 3.6% as of February. Real wages fell 1.3% year-over-year as of February, meaning that rising inflation continues to diminish household purchasing power.

The Federal Reserve has been monitoring the employment market closely for the past year as officials attempt to balance fighting inflation with protecting banks, having already announced a quarter-point rate hike last month.