Other Countries Lead by Example
The U.S., dealing with layoffs and a weaker job report, should look at how other countries have dealt with similar issues as a sign for the American workforce of what they can expect to happen.
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For example, Greece is allowing companies to start a 48-hour work week in an attempt to boost productivity, and South Korean companies are asking executives to work on a Saturday or Sunday to improve business.
Employees Are Suffering
With the threat of what is yet to come, employees can say goodbye to the flexible jobs that they always hoped they would get, including the ability to work remotely.
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Remote roles are hard to find anyway, but it is believed that businesses are going to want any remote employees to come back into the office. This includes those who work hybrid. What’s worse is that they will likely experience some layoffs as well.
Huge Layoffs Are Already Ongoing
Layoffs aren’t necessarily news, as large companies have been laying off hundreds of employees since the beginning of 2024. People had hoped that they would soon see an end to this, but that end doesn’t appear to be in sight.
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Even large companies such as Google have had to lay off over 12,000 workers within the last year alone. No matter how big or small a company is, it still faces economic pressure, and the employees suffer because of it.
Mostly Tech Layoffs
The industry that seems to be suffering the most with these layoffs is the tech industry. Intuit recently had to lay off around 10% of its employees, which works out to around 1,800 people in total.
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It’s not just the redundancies that are happening, as some jobs are being eliminated entirely. For Intuit, this works out to around 300 jobs. In this case, the layoffs are happening so that the company can invest in its future, which is mostly related to AI.
Layoffs Come at a High Price
While most companies might think that laying people off can help save them money, in some cases, it does the opposite. When Google had a mass lay off of its employees, this came at a significant cost.
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From January 2023 onward, Google laid off thousands of its employees. As a result, they spent roughly $2.1 billion on severance payments and other related costs. In the 2024 layoffs, they cost Google a $700 million severance bill.
Unemployment Rates Have Gone Up
The report shows that unemployment rates across the U.S. have gone up dramatically. They are now at the point of being the highest they have ever been since the pandemic.
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As of July 2024, the U.S. unemployment rate is at 4.3%, a three-year high. Naturally, this has worried those in the business world and means the strong job market might be over.
Job Rates and Paychecks Are Low
Both job rates and paychecks in the U.S. are low. Economists had predicted a gain of 175,000 jobs in July 2024. However, employers were only able to add 114,000 jobs.
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Paychecks were also low. Wage growth is measured by the average hourly earnings, which have continued to go down — to the point where they are now lower than they were in May 2021.
More Job Cuts Than Last Year
The latest data shows that 25,885 jobs were cut in July 2024. While this is a lot, it is somewhat good news, as it is 47% less than the number of jobs that were cut in June 2024.
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However, when you compare it to the job cuts in July 2023, it’s clear that economists and employers can’t relax just yet. This year’s unemployment rates are 9% higher than this time last year and are the highest since July 2020.
Recession Concerns
Due to job and paycheck concerns, and the weaker-than-expected job report, some economists are now concerned that a recession could be on the horizon if things carry on in this manner.
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However, others are saying not to worry, as monthly employment rates can change very quickly. This means that just because the employment rates are low right now doesn’t necessarily mean they will continue to get lower.
Employers Aren’t Hiring Anyone
For those trying to get onto the job ladder or who want to get a new job, it seems almost impossible right now as employers are lowering their hiring targets.
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The employer’s hiring targets for July 2024 were 3,676 employees, the lowest monthly total since December 2023 and the lowest of any July since 2009.
Employers Should Do Their Research
Some economists have recommended that employers do their research and see what happened when mass layoffs have occurred in the past and the damage that has been done to their business.
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It has also been recommended that employers see their workers as human beings with feelings instead of immediately letting them go when a business is going through difficult times. The hope is that further layoffs won’t happen. However, just like most things in life, nothing is ever certain.