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Latest Developments In The Job Market, Layoffs, Hiring, The Stock Market And The Economy
Latest Developments In The Job Market, Layoffs, Hiring, The Stock Market And The Economy
There continues to be contradictions in the job market and economy. Increasing layoffs for white-collar professionals coexist with buoyant hiring practices for blue-collar and frontline workers. Despite, but possibly because of the major layoffs, the stock market is running hot and has hit new record highs.
Here’s What’s Up With The Job Market
Google lays off thousands of more employees despite record profits one year after laying off 12,000 employees.
Workers are understandably worried about AI taking over jobs. It’s not actually stealing jobs right now. What's going on behind the scenes is that the companies are shuffling the deck. They’re letting go of employees that don’t possess the right skills for this new AI-driven workplace. The funds saved from the firings are used to put into machine learning and hiring software engineers who are experts in AI.
Showing how tech companies are now in a heated battle to find and hire the best AI talent, Google offered an enormous counter offer of 300% salary increase to an employee who was contemplating a job switch to Perplexity AI, according to Aravind Srinivas, the CEO of Perplexity AI, during a discussion on the Big Technology Podcast.
While this was happening, Google made large layoffs across its Voice Assistant, hardware, engineering and ad sales teams, indicating a continual culling of employees who don’t fit with the new world order.
We also have the usual litany of layoffs. Notable examples include Nike's plan to remove 1,600 jobs, Cisco's decision to shed 4,250 posts, and collective firings amounting to over 150,000 workers amongst big players, like Amazon. Ultimately, these strategic choices demonstrate attempts to realign organizational structures with contemporary requirements and safeguard longevity in ever-evolving commercial environments.
Annual layoffs stand above pre-pandemic levels, but haven't significantly shifted aggregated labor market data. Monthly layoffs fluctuate between 1.3 million and 1.8 million, comparable to pre-pandemic ranges. Initial jobless claims suggest a decrease in filings, hinting at continuing job market vitality.
CEOs Who Fail Still Get Rich and the Workers Get F*cked
You know who doesn't get laid off? CEOs that fail and flounder in their jobs. For example, according to Bloomberg, Citigroup CEO Jane Fraser earned more than $25 million dollars. Citi awarded Fraser a total of $1.5 million in salary and $24.5 million in stock-based and cash incentive awards for 2023, it said in a filing Tuesday. Meanwhile, she fired 20,000 employees and the bank's profits plummeted by 38%.
This increase comes despite Citi's fourth quarter 2023 report showing a net loss of $1.8 billion. The report also includes an FDIC assessment of $1.7 billion, other charges and reserves.
Here’s A Theory Why There Is A Decrease In Unemployment Claims
Nearly 160 tech companies have laid off 41,793 workers this year so far. Since tech employees are usually well-paid, such as software engineers earning a total compensation of more than $500k, it’s not worthwhile for them to file for unemployment benefits that would be a de minimis amount to them.
Other Factors Fueling Mass Dismissals
There is the "copycat effect" playing out. Once a dominant player announces layoffs, competing entities frequently mimic similar tactics hoping to mitigate negative consequences associated with downsizings.
Executives have an anticipation of a potential recession, and companies don’t want to get caught being flat-footed. Company leaders expect slower economic growth and prepare accordingly by shedding excess weight beforehand.
After an unprecedented expansion during remote work booms, current demands necessitated scaling back excessive hiring made during heightened online activities.
There has been continual pressure placed by institutional investors and hedge funds to curtail expenditure as revenue declines occur, compelling streamlining processes involving reduction in manpower.
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Short-Term Effects Of Layoffs On A Company's Financial Performance
Business management knows that there are short-term advantages of layoffs. It includes immediate cost savings coming from salary and benefit payments ceasing for dismissed employees. There will be an accompanying improvement in operating ratios and cash flows, as there are now lower-fixed costs.
However, bear in mind that these positives rarely tell the entire tale.
Long-Term Effects Of Layoffs On A Company's Financial Performance
Over time, companies will notice a diminished morale and drop in productivity. Dismissals erode the remaining workers’ spirits, culminating in dwindling output and augmented attrition risk.
Losing valuable seasoned professionals creates voids in critical areas, impeding efficiency and agility. Widespread terminations engender unfavorable impressions, alienating clients, stakeholders and prospective recruits alike.
Innovation declines in concert and the negative shifts in cultural climate discourage novelty, fostering lethargy and mediocrity. Perceived capriciousness breeds distrust, jeopardizing commitment and retention.
Ultimately, although layoffs deliver prompt dividends, they carry latent hazards imperiling sustainable prosperity. Hence, astute executives weigh alternatives diligently and opt for broad-scale elimination programs.
Hiring
Although layoffs dominate headlines, hiring activity stays elevated:
Total job openings dipped in 2023 but remain substantially greater than pre-pandemic norms.
Robust hiring in fields like healthcare and hospitality offset contractions elsewhere.
Employers expressed cautionary optimism heading into 2024, suggesting moderate expectations for recruitment.
Stock Market
Market fluctuations appear unaffected by layoff coverage:
Amazon will replace Walgreens Boots Alliance in the Dow Jones Industrial Average, according to a Tuesday announcement from S&P Dow Jones Indices, which manages the price-weighted measurement of 30 stocks.
In Other News
A Massachusetts couple volunteers to host migrants, four show up an hour later: “We really knew nothing.”
In case you were wondering what happened to wunderkind Sam Bankman-Fried, he seems happy with his new set of jail friends.
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Jack- great compilation of today’s market conditions.