WASHINGTON
Layoffs in the US have been going at a steady pace since 2023, though they are rising in 2023 due to efforts by companies to increase productivity while reducing costs.
Companies continue their tightening policies as they feel pressured by rising interest rates in the face of inflation and global economic uncertainty.
As companies aim to make and do more with fewer resources and focus on efficiency, they want to reduce the number of staff.
Reasons such as moving toward artificial intelligence (AI) and automation are increasingly being cited for layoffs, as the global AI craze leads companies to focus resources on the relatively new technology.
Layoffs rise 9% in February
The number of workers laid off in the US rose 9% to 84,638 year-on-year in February, the highest since March 2023, according to data from Challenger, Gray & Christmas, a global job placement and career transition firm based in Chicago.
The number of layoffs climbed 98% in 2023 compared to the previous year, reaching 721,677.
Companies ranging from technology to manufacturing, financial services to retail, are reducing staff and layoffs continue to be concentrated in the technology sector.
A total of 28,218 workers were laid off in the technology sector this year, with 12,412 in February, according to Challenger, Gray & Christmas.
Data from the Layoffs.fyi website revealed that 219 tech companies laid off 50,800 employees since the beginning of the year.
Companies are aggressively embracing technological innovations that are dramatically reshaping their staffing needs while cutting costs, said experts.
Experts highlight that layoffs in the technology sector largely reflect companies’ new efforts to work with fewer people and more efficiently, and that new AI tools are expected to help companies achieve their goals, though slowly.
Labor market remains strong despite layoff announcements
Even though layoffs continue, data indicates that the labor market remains strong.
Employment growth continues in the US, while the unemployment rate remains low despite the increase last month.
Non-farm employment rose by 275,000 people in February, above expectations.
The same period saw the unemployment rate rise from 3.7% to 3.9%.
Restructuring plans often cited for layoffs
Most companies site restructuring plans as a reason for layoffs, as well as store, unit, factory closures and cost-cutting measures.
Some firms cite economic and market conditions.
It was of note that some cited AI for the layoffs.
The companies that started the year with layoffs are, among others, Google, Amazon, Twitch, eBay, Riot Games, Discord, Duolingo, Unity, Brex, Wayfair, Macy’s, Citigroup, and Blackrock.
Additionally, Stellantis, Sony, Cisco, DocuSign, Estee Lauder, Expedia, Snap, Zoom, UPS, Levi’s, and Nike are among the companies that have started layoffs.
New companies joining wave of layoffs
Dutch carmaker Stellantis announced that 2% of its staff in engineering, technology and software in the US will be laid off as part of efficiency and cost optimization.
The firm cited the unprecedented uncertainties in the sector and increasing competitive pressures worldwide for the layoffs, and the company continues to make decisions to improve efficiency and optimize its cost structure.
Stellantis’ layoffs involved 400,000 employees according to US media reports.
Sony
Sony Interactive Entertainment, the video game subsidiary of the PlayStation console, announced plans to lay off 900 employees, representing 8% of its global workforce.
Cisco
Californian network firm Cisco announced that it will reduce its global workforce by 5% as a part of its restructuring plan, as the firm aims to reorganize the company and ensure more investment in key priority areas, according to a recent statement.
DocuSign
DocuSign, a US-based digital signature service provider, announced that it will reduce its workforce by 6% as part of a restructuring.
Estee Lauder
US-based cosmetics firm Estee Lauder said that it will decrease its global workforce by 3% to 5% to restructure the firm, as the layoff decision came after the company’s quarterly profit and revenue declined, and the firm reduced its annual profit forecast.
The layoffs will affect 3,100 employees.
Expedia
American travel tech firm Expedia will reportedly lay off 1,500 employees.
Fisker
US-based electric vehicle (EV) startup Fisker announced it will lay off 15% of its staff.
Instacart
American grocery delivery firm Instacart will lay off 250 employees, of 7% of its staff, as the firm directs its focus on profitability.
Morgan Stanley
Morgan Stanley, one of the largest investment banks in the US, is planning to lay off hundreds of employees in its asset management division, according to recent reports.
The layoffs are expected to affect less than 1% of the bank’s employees in the division.
Nike
US-based sportswear brand Nike said it will reduce its workforce by 2% to cut costs.
Okta
Headquartered in San Francisco, the identity firm Okta announced it will lay off 7% of its workforce, as an official said the costs are still too high.
Paramount Global
US-based entertainment conglomerate Paramount Global said it will lay off 800 employees.
Snap Inc.
American tech company Snap Inc. plans to reduce its global workforce by 10%, and media reports said the layoffs will affect more than 500 employees.
The Snapchat-maker had announced that it would lay off 20% of its staff in August 2022, and the firm has since made several layoffs, the latest of which took place in November.
Warner Music
US-based record label Warner Music announced that it will lay off 600 employees.
CEO Robert Kyncl said the changes will save $200 million annually, most of which will be used to support the firm’s core business.
Zoom Video Communications Inc
The online communications firm Zoom decided to lay off 150 people, which amounts to less than 2% of its workforce.
It also announced it will hire people in areas, such as AI in 2024.
UPS
US-based shipping giant UPS will reduce its workforce by 12,000 to realign its resources, it said in a recent statement, adding it will save $1 billion.
Levi’s
American clothing line Levi Strauss & Co said it will reduce its global workforce by 10% – 15%, as the firm aims to support long-term profitable growth to achieve net cost savings of $100 million in 2024, according to a recent statement.
PayPal
The online payment system PayPal will reportedly lay off 9% of its global workforce. CEO Alex Chriss said the firm aims to implement automation.
Microsoft
Microsoft is reportedly going to lay off 1,900 employees in its video game division, namely the Call of Duty publisher Activision Blizzard and Xbox.
Rivian
US-based EV maker Rivian cited economic and geopolitical uncertainties and pressures, and high interest rates for reducing 10% of its workforce.
