A report from Challenger, Gray & Christmas reveals a worrying increase in layoffs, with more than 84,000 jobs eliminated by American employers in February 2024. This marks the highest total of job cuts in the second month of the year since 2009, representing almost a 9% increase compared to the same period in 2023. The technology sector led in the number of layoffs, closely followed by financial firms.
Despite these discouraging figures, the sum of layoffs in January and February showed a decrease of 7.6% compared to the previous year. The technology field noted the highest number of layoffs, with 28,218 affected, while financial companies continued with 26,856 layoffs. Additionally, sectors such as industrial manufacturing, energy, and education also experienced significant increases in the number of layoffs, mostly due to restructuring, store closures, and cost-cutting measures.
New hiring announcements decreased dramatically, marking the lowest total for the start of a year since 2009. Big-name companies, including Citi, UPS, and PayPal, have announced workforce reduction plans, with Cisco and Expedia also making significant adjustments due to reductions in corporate technology spending and declining demand in the travel sector.
The impact of these layoffs has also been felt in the media industry, with a notable decrease in layoffs but an increase in the news sector, where organizations such as the Los Angeles Times, NBC News, Time, and Sports Illustrated have had to make adjustments to their workforce.
Despite these challenges, the unemployment rate in the United States remains low at 3.7% from December to February, underscoring the complexity of the labor market where notable waves of layoffs in various sectors coexist with a relatively stable overall level of unemployment. The increase in layoffs is attributed to various economic, global, and national reasons, including persistent inflation, economic uncertainty, and adjustments to interest rates by the Federal Reserve. These factors have led companies to adopt a more conservative stance, cutting expenses, including labor expenses, to protect their financial health and navigate the challenging economic landscape.