Google headquarters in Mountain View, California, U.S. on Monday, January 30, 2023. Alphabet Inc. is expected to report earnings results on February 2nd.
Marlena Slots | Bloomberg | Getty Images
Companies announced nearly 90,000 layoffs in March, a sharp increase from the previous month and a huge acceleration from a year ago, outplacement firm Challenger, Gray & Christmas reported Thursday.
Planned layoffs for the period totaled 89,703, a 15% increase from February. Year-to-date job cuts have risen to 270,416, a 396% increase from the same period a year ago.
The damage has been particularly severe in the technology sector, which has so far announced 102,391 cuts in 2023. That’s a staggering 38,487% year-over-year increase and accounts for 38% of all staff cuts. Tech has already cut 5% more than all of 2022, according to the report, and is on track to dwarf 2001, its worst year ever amid the dot-com bust.
“We know that companies are approaching 2023 with caution even as the economy is still creating jobs,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas. “With interest rate hikes continuing and corporate costs falling, the large-scale layoffs we’re seeing are likely to continue.”
In other jobs news on Thursday, weekly jobless claims for the week ended April 1 totaled 228,000, higher than the Dow Jones estimate of 200,000, the Labor Department reported. Current receivables rose to 1.823 million, the highest since December 2021.
Benchmark revisions by the department show that applications have been above 200,000 for virtually the entire period since late October 2022.
Financial firms have announced the second-highest rate of job cuts this year, with 30,635 layoffs representing a 419% increase from the first quarter of 2022. Healthcare and retail are the second highest.
At the same time, March planned hiring fell to just 9,044, the worst monthly reading since 2015. Year-to-date, planned hiring is at its lowest quarterly level since 2016.
Market and economic conditions were cited as the main reason for job cuts, with cost cutting being the second most cited factor.
The Challenger report comes a day ahead of the Labor Department’s nonfarm payroll census. Economists polled by Dow Jones expect jobs to rise by 238,000 in March, the smallest increase since January 2020.
Along with the high number of layoffs, job vacancies began to fall.
Available jobs fell below 10 million in February for the first time since May 2021, suggesting at least some easing in the labor market, according to Labor Department data released on Tuesday. The hiring pace fell by 164,000, although layoffs and layoffs fell by 215,000.
Overall, there were still almost 1.7 vacancies per available worker.
The Federal Reserve is targeting an extremely tight labor market as it battles inflation, which is still near 40-year highs. The Fed raised its benchmark interest rate by about 4.75 percentage points over the past year to dampen demand that has fueled rising prices.
According to CME Group’s FedWatch tool, which tracks futures market pricing, markets are currently expecting the Fed to be done raising rates and likely to start cutting rates later this year.
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