A help wanted sign is displayed on the window of a business in Brooklyn, New York.
Spencer Platt | Getty Pictures
Cracks are forming inside US labor market Some companies want to curb hiring, while others are desperately looking for employees.
Microsoft, excitement, road fair, blow up and Facebook-parent Meta they recently announced that they plan to be more conservative about adding new employees. peloton and Netflix announced layoffs as demand for their products slows and the online car dealer to the caravan to cut workforce as it faces inflation and crater stock price.
U.S.-based employers reported more than 24,000 layoffs in April, up 14% from the previous month and 6% from the same month last year, according to Outplacement firm Challenger, Gray & Christmas.
But airlines, restaurants, and others still fill positions. Layoffs in the first four months of the year fell 52% compared to the same period in 2021. Just under 80,000 layoffs were announced from January to April; That’s the lowest figure in nearly three decades for which the company has tracked data.
What emerges is a tale of two job markets, though not equal in size or pay. The hospitality and other service industries are failing to recruit enough workers for what is expected to be a bustling summer rebound after two years of Covid hurdles. Tech and other major employers warn and warn employees that they need to keep costs low.
WE Job Opportunities It rose to a seasonally adjusted 11.55 million at the end of March, a data record going back to 2000, according to the latest available report from the Department of Labor. The number of employees who left the job broke a record with 4.5. million. Recruitments amounted to 6.7 million.
Fees rising but not enough to keep up inflation. and people changing where they spend their money, especially as household budgets shrink, thanks to the highest consumer price increases in the last four decades.
Economists, employers, job seekers, investors and consumers are looking for signals about the direction of the economy and are finding emerging divisions in the labor market. The divergence could mean slowdown in wage growth or self-hiring, eventually reducing consumer spending, which was strong despite faltering consumer confidence.
From airlines to restaurants large and small, companies still aren’t hiring fast enough, which is making them cut growth plans. Demand bounced back faster than expected after these companies shed workers during the pandemic-induced sales decline.
JetBlue Airlines, Delta Airlines, Southwest Airlines and Alaska Airlines Have scale back growth plans are due, at least in part, to staff shortages. JetBlue says pilot wear is higher than normal and will likely continue.
“If your attrition rates are between 2 and 3 times what you’ve seen historically, then you need to hire more pilots just to stop,” JetBlue CEO Robin Hayes said at an investor conference May 17. Said.
Denver International Airport’s concessions, such as restaurants and shops, have made progress with hiring, but still fall short to reach nearly 5,000 by roughly 500 to 600 workers, according to Pam Dechant, senior vice president of airport concessions.
He said many cooks were making $22 an hour, up from $15 before the pandemic. Airport employers offer recruiting, retention, and in at least one case, what they call “a bonus if you come to work every day this week.”
“Consumers spent a lot on goods, not services, during the pandemic, and now we’re seeing in our card data back to services, literally flying away,” said David Tinsley, economist and director at Bank of America. institute.
“Maybe don’t be a little shaken by these people [had] I exaggerated about hiring,” he said.
Companies spearheading job growth are the ones most affected in the early part of the pandemic.
Jessica Jordan, managing partner of Rothman Food Group, is struggling to recruit the workers she needs for her two Southern California businesses, Katella Deli & Bakery and Manhattan Beach Creamery. She estimates that only about 75% of both are staff.
But half of applicants never reply to their emails for an interview, and even new hires who have already submitted their paperwork often disappear without explanation before their first day, he said.
“I work hard to hold their hand every step of the way through the process to make sure they come on day one,” Jordan said. Said.
Larger restaurant chains also have long hiring orders. For example, sandwich chain Subway said Thursday that it is looking to add more than 50,000 new workers this summer. Taco Bell and Inspire Brands, owners of Arby’s, also said they would like to add staff.
Hotels and catering services had the highest turnover rate of any industry in March, with 6.1% of employees quit their jobs, according to the Bureau of Labor Statistics. The overall dropout rate was only 3% that month.
Some of these workers are moving away from the hospitality industry altogether. New York-based 19-year-old Julia quit her restaurant job in February. She said she left because of hostility from both her clients and bosses, and too much overtime being added to her schedule at the last minute. She now works in childcare, she.
“You have to work really hard to get fired in this economy,” said David Kelly, chief global strategist at JP Morgan Asset Management. “You must be really clumsy and obnoxious.”
And if recovering industries are hiring to catch up, the reverse is equally true.
After the hiring boom, several major tech companies froze hiring and announced layoffs as concerns about the economic slowdown, the COVID-19 outbreak and the war in Ukraine hindered their growth plans.
Richly funded start-ups aren’t immune either, even if they don’t suffer the same level of market value decline as public tech stocks. At least 107 tech companies have laid off their employees since the start of the year. layoffs.fyiIt tracks layoffs in the industry.
In some cases, Facebook and Twitter is being canceled Job offers after new hires have already been accepted put employees like Evan Watson in a precarious position.
Last month, Watson received a job offer to join the emerging talent and diversity division at Facebook, which she calls one of her “dream companies.” He notified the real estate development firm he works for and set a start date for May 9 at the social media giant.
Just three days ago, Watson received a call about his new contract. Facebook had just announced He would pause his hiring, and Watson nervously predicted he might receive bad news.
“My heart dropped when I got the phone,” Watson said in an interview. Meta hiring was freezing, and Watson’s recruitment was closed.
“Just like I was silent. I had nothing to say,” Watson said. “Then ‘What now?’ I said. I don’t work at my other company.”
The news disappointed Watson, but he said Facebook offered to pay him severance while he was looking for a new job. Within a week, he was hired as a talent scout at Microsoft. Watson said he “feels good” about landing at Microsoft, where the company is “much more stable in terms of share price.”
Retail giant for months Amazon sagging generous login bonuses and free college education to attract workers. The company has hired 600,000 employees since the start of 2021, but now finds itself overstaffed in its fulfillment network.
Many of the company’s recent hires are no longer needed. e-commerce sales growth cooling. In addition, Amazon CFO Brian Olsavsky said in a meeting with analysts last month that employees who took sick leave due to the increase in Covid cases are returning to work earlier than expected.
“Now that demand has become more predictable, we have sites in our network where we slow down or pause hiring to better align with our operational needs,” Amazon spokesperson Kelly Nantel told CNBC.
Amazon did not respond to questions about whether the company foresees layoffs in the near future.
Discounts and hiring shifts are isolated for now, but some of their managers are nervous.
Bank of America’s Tinsley warned that the job market is still strong.
That said, the pace of employment growth in the services sector is likely to start to slow, he said.
JPM’s Kelly said that even if the market lost 3 million openings, it would still be a job seeker market.
“There’s a strong surplus of demand for workers. That’s really keeping the economy out of recession,” he said.
But layoffs can fluctuate in other industries.
A hiring freeze, layoffs, stagnation in wages, and even a sharp rise in company spending on things like employee benefits and a return to business trip could hurt burgeoning service industries as Covid cases fall.
“The question is, ‘Will consumer spending keep his head above water,'” Tinsley said.
– CNBCs Jordan Novet contributed to this story.