US companies’ layoffs in January and February hit a nine-year record high
- IBJ Bureau
- Mar 10, 2023
Layoffs by US companies over January and February touched the highest since 2009, with the tech sector accounting for more than a third of the over 180,000 job cuts announced, a report showed on Thursday.
In February alone, layoffs in the US stood at 77,770, more than five times higher than the 15,245 job cuts announced a year earlier, according to the report from employment firm Challenger, Gray & Christmas.
“Right now, the overwhelming bulk of cuts are occurring in technology. Retail and financial are also cutting right now as consumer spending matches economic conditions,” said Andrew Challenger, the senior vice-president of the firm.
Tech companies from Microsoft Corp and Google parent Alphabet to PayPal Holdings have cut thousands of jobs this year in an effort to curb spending and protect margins amid an uncertain economic outlook.
“The layoffs that many of these companies are announcing are welcome to investors. This sort of right-sizing the cost structure and rationalising growth are being rewarded in the marketplace,” said James Tierney, the chief investment officer of asset management firm Alliance Bernstein.
Shares of Alphabet, Microsoft, Amazon.com and Meta Platforms have gained between 6 and 54 per cent so far this year after falling between 29 and 64 per cent in 2022.
Federal Reserve Chair Jerome Powell on Wednesday had reaffirmed his message of higher and potentially faster interest rate hikes, which could force companies to slash more jobs.
US firms had announced plans to hire 28,830 workers in February, down 87 per cent from 215,127 a year earlier, the report added.