Fears of layoffs are gripping workers across America, with many worried about whether they will be next.
Layoffs may be less widespread than they seem, but workers are still struggling with uncertainty, an expert says.
Employee confidence has declined. The percentage of workers who reported a positive six-month business outlook for their employer fell to 45.6% in January, according to job search portal Glassdoor. This is the lowest level on record since Glassdoor began tracking sentiment in 2016.
“Everyone is trying to prove their value at work,” said one designer in the North Carolina tech industry whose company said it plans to reduce headcount. She said it was a “worrying” experience, because no one knew which teams would be affected.
“It kind of made things tense and put people on edge for a while,” said the employee, who spoke anonymously because she was concerned about job security.
Titles do not match official metrics
In the past week alone, PayPal PYPL,
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iRobot Erpt,
Plus the Los Angeles Times and Sports Illustrated have all laid off workers as they try to make their businesses leaner. ups ups,
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and Microsoft MSFT,
They all had layoffs.
However, the US economy seems to be doing well. In January, 353,000 new jobs were added, a surprisingly large increase that exceeded expectations for an increase of 185,000 jobs. Unemployment is near its lowest level since the 1960s.
“Blast! What a way to start the new year with the January jobs report out today,” CIBC Economics' Ali Jafari wrote in a note. The data shows that the labor market in the United States [is] Much stronger…than we thought.”
However, given the onslaught of layoff news, especially in technology and media, “job security remains top of mind for employees,” Glassdoor noted. The share of company reviews on Glassdoor that mention layoffs in January rose 27%, compared to last year.
The technology designer, whose company is planning layoffs, said the fear ignited her passion to work harder and be “as sharp as possible.” It has weathered two other rounds of layoffs — one in 2016 and another in 2022.
Another anxious employee, who works at a San Diego-based biotech startup, said his company had grown quickly during the pandemic, but was now in the midst of “huge cutbacks.” His department shrank from five employees to just him. “I am the entire department,” he said.
“It's been really difficult and stressful to be honest,” the worker said. He's talked to recruiters and started applying for jobs, but he senses competition.
Although recruiters have reached out to him, he hasn't applied to as many jobs as he wanted, sending out just 20 applications over the past month, including some in other industries.
“I think there are a lot of people who are aggressively looking for a new role,” he noted, either because they've been laid off from their jobs or because they're worried about cutting back on expenses.
One career expert told MarketWatch that layoffs were top of mind for many business leaders as they head into 2024. “Almost every CEO I know is planning layoffs right now,” says Tessa White, career mobility consultant and founder of Job Doctor. . “I think things will slow down a lot more than we expect.”
However, much of workers' anxiety appears to be disconnected from official measures of unemployment and job cuts, Daniel Zhao, chief economist at Glassdoor, told MarketWatch. Some of the workers' anxiety may be related to the fact that people are comparing the current moment to the hot job market of 2021 and 2022, when employees were moving between jobs and getting big raises.
It's a confusing time for employees. Worrying news of layoffs is mixed with more optimistic reports about the overall economy, which appears to have avoided a recession so far with inflation finally cooling.
Is the fear of layoffs justified?
Although thousands of workers are losing their jobs in technology, media and other industries, there is little evidence so far that layoffs are spreading throughout the economy, Zhao said.
Reports of companies laying off thousands of workers, such as Wayfair losing 1,650 employees or Google losing more than 12,000 jobs — and counting — are not necessarily representative of the entire economy.
About 1.6 million people were laid off in December 2023, according to data from the US Bureau of Labor Statistics, which is still lower than the pre-pandemic normal of 1.8 million, Zhao said.
“So a company lays off 1,000 employees, that sounds like a huge number, but it doesn't even represent 1% of the monthly number of people being laid off from their jobs,” he added.
When small restaurants that can't operate close and lay off their employees, and local businesses go bankrupt, this is a reflection of widespread layoffs.
What's the biggest sign of impending layoffs?
Employees looking for signs of layoffs at their company may find that the biggest indicator is the pace of hiring.
Beyond the pandemic, hiring is at its slowest pace since 2014, Zhao noted, based on Bureau of Labor Statistics data, which has people worried. If workers are looking for jobs, they may find fewer opportunities. They may also find that some companies are putting on a hiring freeze.
“A company that is worried about the future will stop hiring very quickly because this is an immediate action the company can take to stop increasing its costs,” Zhao said. “It's a very slow process to actually go through these layoffs or annual budget cuts, but canceling a job posting or not extending an offer, that's something you can do today.”
A hiring freeze or seeing job openings decline would be the “best early indicators” of a company's sentiment toward the future, he said, “which is itself an indicator of potential layoffs.”
A North Carolina tech worker who feared losing her job noticed that at her old companies, one of the main signs of impending layoffs was reorganization.
“You can read the signs that something is coming when they start moving people around, especially when it doesn't make sense,” she explained. “That's the biggest red flag.”
Who is most concerned about layoffs, and who is most vulnerable to being laid off?
The largest declines in employee confidence were among those working in the utilities industry, transportation and warehousing, and the information industry, which includes technology and media.
Employees in the information sector tend to be the most concerned about layoffs, Zhao said. That's because the sector spent much of last year dominating headlines with layoffs at technology companies.
Among employees, mid-level workers were the most fearful, with their confidence falling the most in January, Glassdoor said. Junior employees ranked second in terms of loss of trust.
“It's not just front-line staff who are worried,” Zhao said. “Even for those people who have more information about the business, their confidence is also declining.”
While some data suggests remote workers are more likely to be laid off in 2023, Zhao said the relationship between not being in the office and being at a greater risk of being laid off wasn't entirely clear.
“We know that many employers are pushing back-to-office plans, and if those companies are laying off workers at the same time, they may choose to target people who either are not complying with return-to-office mandates, or are unlikely to do so, because they live far away,” he explained. Very far from the office.
He added that not being in the office could also mean missing out on gossip or informal conversations about the work situation and whether there is stress or pressure.
What moves you should make if you think you will be laid off from your job
For those who are worried about losing their jobs, there are a few steps you should consider taking. First, check whether you'll get a severance package if you're laid off, which could help you juggle your finances while you look for a new job.
Find places to prune. Cut any memberships or subscriptions that aren't necessary, which may help save some money.
Start communicating with people from your past, as well as find new connections. It's less nerve-wracking to put yourself out there when you're still working, and for some, juggling can be stressful. However, it can pay off: One expert advised that finding a job while keeping it “gives you leverage when it comes to negotiating the terms of the new job.”
“Finally, step back and reset yourself,” Zhao said. Get in the right frame of mind and address your emotional and mental health before you start looking for a job. See if you can find opportunities in other industries that are less sensitive to recessions, such as health care.
The San Diego biotech worker, who has been laid off three times over nearly two decades in the industry due to corporate liquidations, knows the drill.
“So it's not my first time at a rodeo, as they say. It's still nerve-wracking when you're the primary person in the family as far as earning a wage,” he said.
If he is laid off, he expects a severance package.
Meanwhile, a tech worker in North Carolina who is anticipating layoffs said that if she were laid off again, she might leave the industry.
“I might move into finance-based roles, because it feels more secure, or to something healthcare-related,” she said.
But for now, she's not about to go into job search mode yet. “At this point, I would rather be laid off than quit and start looking for a job and interviewing. At least if I get laid off, I know I'll get severance pay.”
