An empty office space in a building in San Francisco, California, on December 5, 2023.
David Paul Morris/Bloomberg/Getty Images
Headlines have been dominated recently by large-scale layoffs at tech, media and transportation firms.
That’s creating some heartburn as to whether these are signs of broader instability in the labor market.
But for now, they appear to be fairly siloed, said Daniel Zhao, lead economist at employment review and job search site Glassdoor.
The technology layoffs appear to be an extension of the “year of efficiency” mantra from last year, Zhao said, adding that these companies appear to be streamlining rather than acting out of a place where they’re no longer financially viable.
“Some of these layoffs that are more about streamlining and getting more efficient aren’t necessarily a risk for spilling over into the broader economy,” he said.
The data tends to agree: Through December, the monthly number of layoffs and the rate of layoffs as a percentage of total employment remain well below pre-pandemic averages, according to BLS’ Job Openings and Labor Turnover Survey (JOLTS) data updated earlier this week.
Also, Worker Adjustment and Retraining Notification Act filings — federally required notices of impending mass layoffs or plant closures — haven’t picked up on a year-over-year basis, Wells Fargo’s House said.
“Those have slowed a little bit, signaling that we’re not about to see an imminent pickup in layoffs unless you really see a sharp deterioration in demand,” she said.
Still, businesses are having to be more disciplined in terms of their headcount amid changing labor market dynamics; specifically, far fewer people are quitting, she said.
Workers are voluntarily leaving their jobs at the lowest rate since the fall of 2020, JOLTS data shows. The hiring frenzy of recent years has leveled out, and there are fewer open jobs; plus, job-switchers have less of a financial incentive now: Their median annual pay gain in January was 7.2%, the lowest since May 2021, according to payroll processor ADP.