Rapid interest rate hikes and weak consumer demand has led to a string of layoffs across corporate America. American banks, big tech firms and Wall Street giants, including Google, Microsoft and Amazon, are leading the way as they look to tighten down the hatchets and rein in costs to ride out the global economic turndown.
According to tracking site Layoffs.fyi, tech companies shed more than 150,000 workers in 2022, and more are expected as growth in the world’s biggest economies slows after the pandemic-led demand boom over the last couple of years.
Some of the biggest layoffs include the US tech giant Google, who recently announced plans to lay off 12,000 people from its workforce, while Microsoft has said it would cut a further 10,000 jobs by the end of the third quarter of fiscal 2023. Amazon has said that company-wide layoffs would impact over 18,000 employees, and the Meta Platform – Facebook’s parent – said it would cut 13% of its workforce, or more than 11,000 employees, as it struggles with a weak advertising market and mounting costs.
And in the banking world, the Wall Street powerhouse, Goldman Sachs, began laying off staff in January in a sweeping cost-cutting drive, with job cuts expected to be just over 3,000. It would be the biggest workforce reduction for the bank since the financial crisis.
It isn’t just the big firms that are facing hard times, many companies are facing tough decisions in the current economic crisis, whether that be layoffs among their workforce or coming up with innovative ways to weather the storm. Retail companies, for example, are trying to find new ways to target gen Z, the generation born after the millennials who are rapidly becoming a critical audience for marketers and brands to understand. Embracing digital advertising is one thing retailers are doing to target this demographic, along with using the power of social media.
Another method industries are using to bring in more customers and generate more revenue is incentives. Online casino databases like Casino Meter list tens of different bonuses designed to incentivize players to join different online casinos, and many supermarkets use loyalty points to keep customers coming back to their shop. With the rise in cost of living impacting millions, businesses need to keep finding new ways to retain their customers as well as bring new ones in.
This recent string of layoffs across corporate America has also had a knock-on effect on other businesses who rely on these companies to make money. WeWork Inc, for example, is a New York-based company which offers workstations, private offices and customized floors, and it has enjoyed a pandemic-driven shift to flexible work outside traditional offices. However, corporate headcount reductions, particularly in the tech world, are starting to hurt companies like WeWork, as they dial down their requirements for flexible office space capacity.
In February, WeWork forecasted lower-than-expected revenue for the current quarter, signaling the company was feeling the heat of mass layoffs in the tech sector. Shares of WeWork fell 5.5% in morning trade, after the company forecast current-quarter revenue of between $830 million and $855 million, below analysts’ expectations of $918.4 million. The pressure is further amplified by the fact that WeWork’s co-working facilities were actually built for smaller companies, who will be among the hardest hit during an economic downturn.
This recent spate of job cuts across corporate America is piling up as companies adapt to a new reality. And with these layoffs coming in a period of slowing growth, and higher interest rates to battle inflation, they do not look like they are going to stop anytime soon. There is some hope though, according to some experts, who believe that the current wave of cuts could start slowing by the second half of 2023, if the Federal Reserve pauses the rate hikes and maybe even starts bringing them down.