Job cuts surge 127% in November as companies brace for economic downturn
Employers announced plans to cut 320,000 jobs this year, analysis shows
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The pace of job cuts by U.S. employers accelerated in November, with the number of layoffs climbing 127% from just one month ago, according to a report published on Thursday by Challenger, Gray & Christmas.
Companies announced 76,835 job cuts in November, led by the technology sector, the analysis showed. That is 417% higher than the same time one year ago.
So far this year, employers announced plans to cut more than 320,000 jobs, a 6% increase from the nearly 303,000 cuts announced in the equivalent time period last year. About 80,000 of the cuts this year stem from the technology sector.
"The tech sector has announced the most job cuts this year by far," said Andrew Challenger, senior vice president of the Chicago-based Challenger, Gray & Christmas. "While other industries are cutting jobs at a slower pace, hiring appears to have slowed as well."
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Job seekers visit booths during the Spring Job Fair at the Las Vegas Convention Center Friday, April 15, 2022. ((K.M. Cannon/Las Vegas Review-Journal) / Getty Images)
A growing number of companies, particularly in big tech, are battening down the hatches as they warn of a grim economic outlook.
Amazon, Apple, DoorDash, Meta, Morgan Stanley, Lyft and Twitter are among the companies either implementing hiring freezes or letting workers go as the Federal Reserve moves to raise interest rates at the fastest pace in decades in order to combat inflation.
Economists widely expect the Fed to trigger a recession with higher interest rates, which could force consumers and ultimately businesses to pull back on spending.
Fed policymakers have made it clear that they anticipate unemployment to climb as a result of their interest-rate hike campaign.
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FILE - A hiring sign is displayed in Downers Grove, Ill., on June 24, 2021. (AP Photo/Nam Y. Huh, File / AP Newsroom)
Updated projections from the Fed's meeting showed unemployment rising to 4.4% by the end of next year, up from the current rate of 3.5%. That is significantly higher than in June when policymakers saw the jobless rate inching up to 3.7%. That could mean roughly 1 million Americans lose their jobs between now and the end of 2023.
Fed Chairman Jerome Powell has conceded that higher rates could "give rise to increases in unemployment."
"We think we need to have softer labor market conditions," Powell said in September. "And if we want to set ourselves up really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn't."
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The Challenger, Gray & Christmas report precedes the release of the November jobs report on Friday morning, which is expected to show that employers hired 200,000 workers following a gain of 261,000 in October. The unemployment rate is expected to hold steady at 3.7%.