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According to Challenger Gray&, a US employment consulting firm; The latest report released by Christmas (hereinafter referred to as "Challenger") shows that in 2023, US companies plan to lay off a total of 721600 employees, an increase of 98% from 2022 and a new high since 2020.
If we do not consider the super high data (more than 2 million layoffs) in 2020 caused by the COVID-19, the number of layoffs of American enterprises in 2023 will be the highest since 2009 (1.288 million layoffs).
Technology companies are the hardest hit areas for layoffs
The technology industry is undoubtedly the "disaster zone" for layoffs in American companies.
Last year, the number of layoffs in the US technology industry increased by 73% year-on-year, reaching 168000, making it the industry with the highest number of layoffs in the country. This figure is only slightly lower than the annual record of 168400 layoffs in the technology industry when the US Internet foam burst in 2001.
In 2023, tech giants such as Meta and Amazon conducted several high-profile technology layoffs. These companies expanded aggressively in the early days of the COVID-19 epidemic, but now, as the demand brought by the epidemic has cooled, these companies have cut back sharply. Meta CEO Mark Zuckerberg even referred to 2023 as Meta's "efficiency year".
Challenger added in the report, "The technology industry will continue to be affected by artificial intelligence, mergers and acquisitions, as well as resource and talent restructuring."
Growth in layoffs across industries in the United States (2022-2023)
The second largest number of layoffs is in the US retail industry, with 78800 layoffs, an increase of 274% year-on-year. The healthcare and financial industries are ranked third and fourth in terms of layoffs, respectively.
Challenger stated, "Although the healthcare industry has a large number of recruits, we also see a high turnover rate in the industry, which is more volatile than most industries... because, like the technology and finance industries, these areas (recruitment numbers) have experienced significant increases before, so now they have to return to normal with the changes that occur in the post pandemic period."
The labor market is cooling down
Although companies such as Spotify, Hasbro, Amazon, and Citigroup announced layoffs last winter, data shows that the period of the largest layoffs last year was still in the first half of 2023. In the second half of the year, the number of layoffs by American companies has decreased.
"The pace of layoffs has begun to stabilize, and recruitment will remain stable by the end of 2023. Nevertheless, labor costs are still high," said Andy Challenger, Senior Vice President of Challenger, in a report. "As we enter 2024, employers are still very cautious and adopting a cost cutting model. Therefore, for many job seekers, the recruitment process may slow down. In the first quarter of this year, corporate layoffs will continue, although the pace has slowed down."
In addition to an increase in layoffs, other signs also indicate that the labor market is cooling down.
A survey released by Challenger last month showed that 34% of US employers did not pay bonuses in 2023, which is higher than 27% in 2022 and the highest proportion since 2019. In 2019, 36% of companies decided not to give bonuses to employees.
The ADP employment report released this Thursday showed that although the number of US jobs increased for the fourth consecutive month in December, the wage growth of employed individuals slowed down compared to the previous month.
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