Happy And Succeeding In The Future Of Work
We’re Going From The Great Resignation To The Great Layoffs
Massive Job Losses Are Needed To Kill Inflation
Jerome Powell, head of the Federal Reserve Bank, said he was going to crush the economy in an all-out assault on inflation. The problem with his program is that it will cause massive layoffs. In what feels like a head-on collision, Powell needs people out of work. If people lose their jobs, they won’t have the discretionary income to spend on buying stuff, traveling, going out to eat or attending concerts and sporting events. With the cessation of spending, the price of goods and services will fall and so will inflation.
The Calm Before The Hurricane
For a while, it didn’t feel like anything was happening. We argued about whether or not we’re in a recession, and pointed to the large, surprising increase in new positions created in last month’s jobs report. The stock market rebounded around 17% making up some of the losses felt when investors realized that Powell wasn’t bluffing.
On Monday, the stock market plunged about 2%, as hedge funds revealed they held $125 billion in short positions. This means that they are betting big that the stock market will plummet.
PwC Says Get Ready For Massive Job Cuts
According to a study conducted by large management consulting, audit and accounting firm PwC, more than half of all U.S. companies are planning to lay off employees, in preparation for the inevitable downturn in the economy.
The PwC survey, which included around 700 top executives and board members across the country, found that more than 50% of companies have already enacted hiring freezes. Around 40% have rescinded job offers and did away with signing bonuses for new hires. Nearly half of the executives self-reported that their firm has already started laying off workers or plans to swing the axe and cut down headcount. We’re going from the Great Resignation to the Great Layoffs.
Wall Streeters Are Getting Freaked The F*K Out
Bankers, brokers and traders are scared. Young bankers are worried about losing their lucrative jobs, as deal making has slowed down, according to Bloomberg. The five largest U.S. banks are seeing their revenues fall by 43% in the first half of 2022, compared to the same time last year.
The reasons include an escalation of the Russia and Ukraine war, which may ensnare America into a global conflict, runaway inflation, a recession, the plunging stock market and real estate prices falling, as families can’t afford to purchase homes because interest rates have risen too high for them to meet the monthly mortgage payments.
Investment banks and financial firms are also slow walking new hires. Newly minted, well-paid bankers with a few years of experience under their belt and earning nearly $200k in total compensation are starting to sweat.
Americans Don’t Need To Worry About Not Affording Homes, As The Cost Of Childrearing Has Skyrocketed
The Brookings Institution, a place where a bunch of smart people think about stuff, reported that the expenses related to raising a child from birth to the age of 17 has escalated to about $300,000, as inflation is out of control. The average amount a married, middle-income couple with two children, according to the Wall Street Journal, would need to shell out is $310,605—$18,270 a year—to rear a kid born in 2015 through high school.
The Housing Market Is Taking A Hit
We are seeing one of the worst declines in home sales in 20-plus years. Existing Home Sales data showed a drop of almost 6% from June to July and a 20.2% free fall compared to the same period only last year. This is the sixth consecutive month of decline in real estate. The drop in prices is due, in large part, to about a doubling of interest rates going from about 3% to 6%. There’s talk of a housing recession in terms of declining home sales and home building. The uncomfortable increase in interest rates is part of Powell’s vision to cool down the economy to battle back against out-of-control inflation.
Tiktok failed to load.Enable 3rd party cookies or use another browser
Despite All The Issues, Apple Employees Refuse To Go Back To Work
Apple offices are said to be amazing. The amenities and perks offered to the tech professionals are better than being in your cramped apartment. However, despite free food, laundry, games and other cool stuff, Applers don’t want to come into the office.
In a mean-spirited, draconian, all-employee memo from Tim Cook, the CEO of Apple said workers must pretty please come into the office for at least three days a week starting in September. The days include Tuesdays, Thursdays and a third day to be determined later on.
In response, employees have collectively said, “Nope, not gonna do it!” They have started a petition stating that the firm risks stifling diversity and staff well-being by restricting their ability to work remotely. Evidently, they couldn’t care less about Cook’s concerns for “preserving the in-person collaboration that is so essential to our culture.”
Instead, Apple employees said, “We believe that Apple should encourage, not prohibit, flexible work to build a more diverse and successful company where we can feel comfortable to ‘think different’ together,” according to the Financial Times.
It’s Not Just Apple, AT&T Is Hanging Up On The Office
Like most Americans, AT&T workers would prefer to work from home instead of schlepping into an office. Their union, Communications Workers of America (CWA), struck a deal with the telecom giant to extend their remote policy through March 2023. The workers claim that they are being pushed to return sooner. They are concerned over contracting Covid, especially those in crowded call centers.
The Cuts Keep Coming
In August alone, there have been massive downsizings, hiring freezes and job offers rescinded.
The Wall Street Journal reports that so many companies have made cuts, it’s now commonplace to see newly unemployed people seek out help from recruiters on social media platforms.
The layoffs cross over to an array of different sectors and geographies. LinkedIn shared the following: Boston-based Wayfair is cutting 870 jobs worldwide, as customers shift their spending away from home goods. Crypto lender Genesis announced it’s laying off 20% of its workforce amid ongoing turbulence in the cryptocurrency market. Apple has laid off about 100 contract-based recruiters, as it seeks to slow hiring and spending, reports Bloomberg.
HBO and HBO Max laid off 14% of their staff, or 70 employees, following the merger of parent company WarnerMedia and Discovery. SoulCycle has shuttered a quarter of its cycling studios and cut 75 employees.
Signify Health, a Dallas-based home health services company, is laying off almost 500 workers in four states. Peloton Interactive cut nearly 800 employees and announced store closures and price increases. Gannett, the nation's largest newspaper publisher, is laying off dozens of journalists across at least 20 newsrooms.
Citing an "ever-changing macroeconomic environment," Best Buy has cut hundreds of store-based jobs, the Wall Street Journal reports. Malwarebytes employees are posting on LinkedIn about layoffs at the Bay Area-based cybersecurity firm. Layoffstracker.com reports 125 people were affected by the cuts.
Meditation app Calm is laying off 20% of its staff, according to an internal memo obtained by the Wall Street Journal. Warby Parker, an online retailer of prescription glasses, is laying off 63 corporate employees, 2% of its overall workforce and 15% of its corporate staff. Video-game developer Jam City, which has offices across the U.S. and Canada, is laying off about 200 employees.
LinkedIn members shared about staffing cuts made at other companies: real estate tech platform Doma, which also laid off staff in May; cannabis tech Weedmaps; childcare management app Brightwheel; analytics software platform Sisu and payments processor Fiserv.
Walmart is laying off as many as 200 corporate employees, in areas such as merchandising and real estate.
Online brokerage Robinhood laid off 23% of its staff in its second round of cuts this year.
Global software giant Oracle is laying off an unspecified number of employees in its U.S. customer experience unit.
7-Eleven laid off about 880 corporate employees after its $21 billion acquisition of Speedway.
Ford is cutting up to 8,000 jobs, mostly in its gas-fueled vehicle division, anonymous sources told Bloomberg.
Crypto giant OpenSea cut 20% of staff.
Victoria's Secret laid off about 160 managers as part of a restructuring.
Electric carmaker Rivian said it was cutting "hundreds" after conceding it "grew too fast."
Twitter laid off about one-third of its talent acquisition team.
Book Jack Kelly As Your Next Keynote/Guest Speaker
Contact us if you would like to book Jack Kelly for your next in-person or virtual corporate event, seminar or conference.
Media Inquiry
Jack Kelly is available to discuss a broad range of topics, including, but not limited to: the job market, the state of recruiting, trending news stories and career advice. He has appeared on CNBC, MSNBC, NBC, FOX, CBS, BBC and NPR. Jack has been quoted in the the Wall Street Journal, Washington Post, Economist, INC., New York Post and more.
About Jack Kelly
Jack Kelly is the CEO, founder, and executive recruiter at one of the oldest and largest global search firms in his area of expertise. He has personally placed thousands of professionals with top-tier companies over the last 20-plus years. Jack is passionate about advocating for job seekers. In doing so, he founded a start-up company, WeCruitr, at the beginning of the Covid-19 pandemic. The mission of WeCruitr is to help people in need and make the job search more humane and enjoyable. As a proponent of career growth, Jack shares his insider interviewing tips and career advancement secrets as a Senior Contributor for Forbes. He also covers timely topics related to corporations, high-profile people, Wall Street, politics and other important matters. The pieces offer insight into the news and how it may impact your career. Jack is the author of Happy and Succeeding in Your Job Search, as well as the host of Happy And Succeeding In The Future Of Work and cohost of the Blind Ambition podcast.