UNITED STATES NEWS

Where the jobs are: Strong hiring in most industries has far outpaced high-profile layoffs

Feb 2, 2024, 5:17 PM

WASHINGTON (AP) — Blockbuster job growth in the past several months has coincided with high-profile layoff announcements by a number of large companies.

So, how are both occurring at the same time? It’s not as contradictory as it might seem. Recent job cuts have been concentrated mainly in just a few sectors: technology, finance and media.

Relative to the U.S. labor force of 160 million people, layoffs so far have been dwarfed by consistently vigorous hiring — a monthly average of 248,000 jobs added over the past six months. The unemployment rate is still just 3.7%, barely above a 50-year low.

It turns out that many of the companies that are now shedding jobs had over-hired during the pandemic, when they thought the trends that emerged then — especially a surge in online shopping — would continue apace. As the economy has normalized, many of these companies have discovered that they no longer need so many employees and have responded with layoffs.

In January, American businesses and other employers added a blistering 353,000 jobs — the biggest monthly haul in a year. The government also revised up its estimate of job gains in November and December by a combined 126,000. The data provided compelling evidence that most companies, large and small, are confident enough in the economy to keep hiring.

Several of the companies that have announced layoffs are among the most well-known household names: Google, Amazon, eBay, UPS, Spotify and Facebook’s parent Meta. Not that they’ve been the only ones. Challenger, Gray & Christmas, a leading outplacement firm, reported this week that businesses announced 82,000 layoffs in January, the second-most for any January since 2009.

Here are some reasons why these seemingly disparate trends are coinciding:

JOB GAINS AND JOB CUTS ARE HAPPENING IN DIFFERENT INDUSTRIES

In most industries, businesses have kept adding workers over the past three months. Manufacturers, for example, added 56,000 in November, December and January combined. Restaurants, hotels and entertainment companies gained nearly 60,000 over that time. Health care providers — hospitals, doctors’ offices, and dentists — added a whopping 300,000.

They’re not all low-paying jobs, either: A sector that the government calls professional and business services, a sprawling category that includes accountants, engineers, lawyers and their support staff — has 120,000 more jobs than it did in October. Federal, state and local governments, which regained their pre-pandemic levels of employment in September, also added nearly 120,000 jobs over that period.

The job cuts, by contrast, have been more concentrated. The Labor Department doesn’t track technology jobs specifically, but Friday’s jobs report pointed to signs of the industry’s struggles: The unemployment rate for workers in what the government calls the “information” sector, which includes media and tech workers, jumped to 5.5% in January from 3.9% a year ago. That’s nearly 2 percentage points above the national jobless rate.

LAYOFFS DON’T MEAN THE ECONOMY IS WEAK

More confusing is why companies would cut workers if the economy is growing and consumers keep spending. Last week, the government estimated that the economy expanded at a healthy 3.3% annual pace in the October-December quarter after robust growth of 4.9% the previous quarter.

Companies tend to shed jobs for all sorts of reasons, sometimes to reflect changes in their business strategy or to maintain or boost their profit margins. Many high-tech companies that went on hiring binges in 2022, as the economy accelerated out of the pandemic recession, miscalculated the longer-term demand for their products and services.

In its survey of job cuts, Challenger, Gray & Christmas said the leading reason companies cited last month for laying off workers was “restructuring.” A year earlier, it was “economic conditions,” economists at Renaissance Macro noted, meaning that companies had previously worried more about the state of the economy.

Todd McKinnon, CEO of the software company Okta, said in a message announcing that the company would cut about 400 jobs that it entered 2023 “with a growth plan based on the demand we experienced in the prior year.”

“This led us to over-hire for the macroeconomic reality we’re in today,” he wrote.

THE LAYOFFS ARE SPREAD OVER TIME

High-profile job cuts typically involve many layoffs that aren’t implemented immediately. For example, UPS, the delivery and logistics provider, announced earlier this week that it would cut 12,000 jobs this year. But it said those reductions will take place over months. So they weren’t included in the January jobs data that was released Friday because the layoffs hadn’t yet taken place.

IT’S A REALLY BIG ECONOMY

This doesn’t necessarily mean that the government’s jobs figures will worsen over time as reductions by UPS and others are implemented. Jobs cuts are deeply distressing and disruptive for people who suffer them. But layoffs even of UPS’ magnitude don’t really move the needle in the vast U.S. economy. Each month, roughly 5 million people leave their jobs or are laid off, government data shows, while more than 5 million are hired.

A raft of other data confirm that overall, the job market is fundamentally healthy. The number of people seeking unemployment benefits, long seen as a measure of layoffs, remains at a very low level. And non-government data, including hiring tracked by the payroll provider ADP, shows that private-sector companies keep adding workers.

United States News

Associated Press

Bernice Johnson Reagon, whose powerful voice helped propel the Civil Rights Movement, has died

NASHVILLE, Tenn. (AP) — Bernice Johnson Reagon, a musician and scholar who used her rich, powerful contralto voice in the service of the American Civil Rights Movement and human rights struggles around the world, died on July 16, according to her daughter’s social media post. She was 81. Reagon was probably best known as the […]

35 minutes ago

ADD MORE LOCATIONS FILE - An envelope containing a 2020 census letter mailed to a U.S. resident is ...

Associated Press

US census takers to conduct test runs in the South and West 4 years before 2030 count

Six places in the South and West will host practice runs four years prior to the 2030 U.S. census, a nationwide head count that helps determine political power and the distribution of federal funds. Residents of western Texas; tribal lands in Arizona; Colorado Springs, Colorado; western North Carolina; Spartanburg, South Carolina; and Huntsville, Alabama, will […]

40 minutes ago

Vice President Kamala Harris arrives to speak from the South Lawn of the White House in Washington,...

Associated Press

FACT FOCUS: A look at false claims around Kamala Harris and her campaign for the White House

The announcement that Vice President Kamala Harris will seek the Democratic nomination for president is inspiring a wave of false claims about her eligibility and her background. Some first emerged years ago, while others only surfaced after President Joe Biden’s decision to end his bid for a second term. Here’s a look at the facts. […]

41 minutes ago

Vice President Kamala Harris walks back into the White House after speaking from the South Lawn of ...

Associated Press

Kamala Harris smashes fundraising record with stunning $81 million haul over 24 hours

NEW YORK (AP) — Kamala Harris is smashing fundraising records as the Democratic Party’s donors — big and small — open their wallets for the vice president in the immediate aftermath of President Joe Biden’s stunning decision to step aside. In total, Harris’ team raised more than $81 million in the 24-hour period since Biden’s […]

44 minutes ago

FILE - Emergency personnel arrive to evacuate people at a mass shelter, Sept. 2, 2021, in Independe...

Associated Press

No prison for a nursing home owner who sent 800 residents to ride out a hurricane in squalor

NEW ORLEANS (AP) — A Louisiana businessman who sent more than 800 elderly residents from his seven nursing homes to ride out Hurricane Ida in a crowded, ill-equipped warehouse pleaded no contest to 15 criminal counts Monday and was sentenced to three years of probation. Bob Dean Jr. also must pay more than $358,000 in […]

50 minutes ago

Associated Press

New Orleans civil rights icon Tessie Prevost dead at 69

NEW ORLEANS (AP) — Funeral services will be held Saturday for one of four Black girls who helped integrate New Orleans public schools in 1960. Tessie Prevost Williams, known as one of the “New Orleans Four,” died July 6 following a series of medical complications. She was 69. On Nov. 14, 1960, Prevost Williams, along […]

1 hour ago

Sponsored Articles

...

Sanderson Ford

3 storylines to get you revved up for the 2024 Arizona Cardinals

Arizona Cardinals training camp is just a couple weeks away starting on July 25, and Sanderson Ford is revved up and ready to go.

...

Collins Comfort Masters

Here’s how to be worry-free when your A/C goes out in the middle of summer

PHOENIX -- As Arizona approaches another hot summer, Phoenix residents are likely to spend more time indoors.

...

DESERT INSTITUTE FOR SPINE CARE

Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.

Where the jobs are: Strong hiring in most industries has far outpaced high-profile layoffs