Wave of layoffs in the US: why large companies are cutting jobs
30 January 17:13
This week, a number of major American corporations announced large-scale staff cuts, totaling more than 52,000 jobs. Experts attribute this to the end of the post-pandemic hiring boom, economic uncertainty, and rising investment costs in artificial intelligence.
The Financial Times reports on the new wave of layoffs, according to "Komersant Ukrainian".
What happened
Among the companies that have announced layoffs are Amazon, UPS, Dow, Nike, Home Depot, and other major players in the American market. Some employers explain the decision by a desire to make the organizational structure “leaner” amid the economic slowdown and the need to reallocate resources to AI development.
This wave of layoffs is concentrated in a relatively small group of giants, but it has heightened concerns about the overall state of the US labor market.
Why companies are cutting jobs
Analysts note that businesses are increasingly looking to automation and AI as a way to reduce personnel costs.
Goldman Sachs’ chief US economist David Mericle noted that companies are “increasingly willing to use artificial intelligence to reduce labor costs,” and rhetoric about optimizing staffing is becoming more common.
After the pandemic boom
After the start of the Covid-19 pandemic in 2020, American companies actively expanded their staff: online commerce grew, and government stimulus programs supported economic activity.
However, over the past year, the labor market has slowed down. Due to uncertainty in trade and AI development, employers have become more cautious — they are in no hurry to hire new employees or lay off workers en masse.
What is happening in the labor market now
Job losses and unemployment claims have increased slightly but remain below pre-pandemic levels. Last month’s unemployment rate was 4.4%, slightly lower than November’s 4.5%.
The Federal Reserve System is talking about signs of stabilization in the labor market, despite high-profile news of layoffs at large corporations.
Economists’ opinion
Indeed economist Felix Aydala notes that overall, the level of layoffs for the year is not abnormal compared to historical data. At the same time, the current situation appears contradictory due to a significant slowdown in hiring.
According to him, it is precisely the weak dynamics of job creation that creates a sense of market cooling, even if the scale of layoffs is not record-breaking.
