According to outplacement agency Challenger, Gray & Christmas’s report released on Thursday, businesses announced roughly 90,000 layoffs in March, a significant increase from the previous month and a significant acceleration from a year earlier.
For the time period, there were 89,703 planned layoffs, 15% more than in February. To date this year, there have been 270,416 job cutbacks, up 396% from the same time last year.
The harm was notably severe in the technology sector, which has so far 2023 reported 102,391 cutbacks. Incredibly, that represents a 38,487% increase from the previous year and accounts for 38% of all personnel cutbacks. According to the report, tech has already experienced 5% more cuts than it did for the entire year of 2022 and is on track to surpass 2001, the worst year ever due to the dot-com crisis.
Although the economy is still producing employment, employers are approaching 2023 cautiously, according to Andrew Challenger, senior vice president of Challenger, Gray & Christmas. The widespread layoffs we are currently witnessing are likely to continue as long as rate hikes continue and businesses keep expenses under control.
In related job news, The Labor Department said on Thursday that weekly unemployment claims reached 228,000 for the week ended April 1, exceeding the 200,000 Dow Jones projection. The number of ongoing claims increased slightly to 1.823 million, the highest level since December 2021.
According to benchmark revisions from the agency, claims have exceeded 200,000 almost continuously since late October 2022.
With 30,635 layoffs this year, financial companies have declared the second-highest rate of job cutbacks this year, a 419% increase from the first quarter of 2022. The next highest sectors are healthcare and retail.
At the same time, March had the lowest level of planned hiring since 2015, reaching just 9,044. Planned additions are at their lowest quarterly total since 2016 when viewed on a year-to-date basis.
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Market and economic conditions have been highlighted as the primary cause of job cutbacks, with cost-cutting coming in second.
The Labor Department’s nonfarm payroll total is one day behind the Challenger report. The Dow Jones survey of economists predicts 238,000 new jobs in March, which would be the weakest gain since January 2020.
In addition to the high number of layoffs, fewer jobs are now available.
According to Labor Department data issued on Tuesday, the number of open posts in February fell below 10 million for the first time since May 2021, showing at least some relaxation in the labor market. While layoffs and discharges decreased by 215,000, the hiring rate dipped by 164,000.
Overall, there were still around 1.7 job opportunities for every worker that was available.
The Federal Reserve has been focusing on the previously extremely tight labor market as it fights inflation that is still hovering around 40-year highs. Over the past year or two, the Fed has raised its benchmark borrowing rate by 4.75 percentage points in an effort to moderate the demand that has driven up prices.
Non-essential spending has been reduced by half of all UK customers.
The FedWatch tool, developed by the CME Group and used to monitor prices in the futures market, indicates that markets now believe the Fed has finished hiking rates and will start decreasing them later this year.
