US Job Cuts Surge in 2023, Tech and Retail Industries Most Affected
In a new report published by professional outplacement firm Challenger, Gray & Christmas, it has been revealed that US companies planned a staggering 721,677 job cuts last year, marking a significant 98% increase from the previous year’s layoffs. The tech and retail industries were hit the hardest, with a number of high-profile tech companies, including Meta and Amazon, slashing jobs during that period.
The report states that in 2023, around 168,032 employees were laid off, indicating a stunning 73% increase from the previous year. Experts now predict that this problem could worsen in 2024 as the labor market continues to soften, with high-interest rates and stubborn inflation compounding the issue.
According to the report, the tech sector, in particular, will continue to feel the impact of emerging technologies such as artificial intelligence, as well as mergers and acquisitions. This realignment of resources and talent is expected to lead to further job cuts in the industry. Retail companies also accounted for a significant portion of the job cuts in 2023, slashing 78,840 positions, which marks a 274% increase compared to the same period the previous year.
Healthcare and product manufacturers, including hospitals, also experienced a significant number of layoffs, with 58,560 positions being eliminated in 2023. This represents a 91% increase from the previous year’s layoffs.
The reasons behind these job cuts were mainly attributed to deteriorating market and economic conditions in the US. Additionally, several companies cited store closures, bankruptcy, and the integration of artificial intelligence as contributing factors to the layoffs.
The report also reveals that in 2023, an increasing number of employers opted not to give out bonuses, with 34% of companies forgoing bonuses compared to 27% the previous year. This is the highest rate since 2019, indicating a shifting trend in company bonus practices.
Looking ahead, experts emphasize the need for caution and flexibility among retailers as they navigate the challenging employment landscape in 2024. With employers still cautious and in cost-cutting mode, the hiring process is likely to slow down, and further job cuts may occur in the first quarter.
In conclusion, the US job market saw a significant surge in job cuts in 2023, particularly in the tech and retail industries. The challenges posed by high-interest rates, stubborn inflation, and emerging technologies have resulted in companies realigning their resources, talent, and budgets. As the labor market softens, it is crucial for employers to exercise caution, flexibility, and consider alternative ways to sustain their businesses while minimizing the impact on their workforce.
