Every month when the US jobs report comes out, they’re talking about an increase in jobs or a great jobs report. But when I read the news, I keep hearing about these companies cutting 5%, 8%, etc. of their workforce.
Most of them seem to be “white collar” jobs, and I understand why they’re doing it, but the reports feel disconnected from reality. I personally know people that have been laid off. I’m not trying to e political, I’m just trying to understand what I’m missing? Where is the disconnect?
In: Economics
because you will never see articles about “<random company> continues hiring like they normally do”
Layoffs are good headlines. That’s it. Google laying off 10k workers gets more clicks than an article about the 100 small to medium companies that benefitted form Google laying off those 10k workers.
Hundreds of thousands of people get fired from their job literally every month in the US. During the big tech layoffs that happened at the start of last year, tech employment was still going up. As big as Google, Facebook, Amazon, etc. are they are still only a tiny fraction of the people employed in the US.
An article pointing out that 10% of a company’s labor force is only like .0001% of the US labor force isn’t headline worthy.
EDIT. Where the disconnect could be for you is in understanding why companies would be laying off. Some companies hired an insane amount of people following COVID as business was booming (think Amazon). Some companies hired people (Facebook) that they didn’t even need. Well, the rest of the economy started catching up and then the Great Resignation happened and workers were getting crazy pay raises. So now they carry a way larger labor budget than prior so their profits are down and they have to appease shareholders. So, they lay off the people they no longer need to operate and only hired because for a few years they could get away with it. In other cases (FINTECH, ECommerce) there was a crazy market for online trading/shopping that dried up and those companies are struggling now that people are back to normal.
A lot of smaller firms could not compete with big companies during these time periods because they simply didn’t have the money to do so. Now that these workers are back on the market they actually have the opportunity to hire the people they’ve needed for years. It’s kind of a cycle that feeds itself a little. When more companies can compete for labor and therefore increase production, it makes it harder for other companies to compete on the business end. The labor market is really just rebalancing itself still from a long period of weird activity post-COVID.
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