Some of the most prominent names in the corporate sector initiated the year by implementing substantial workforce reductions. The sportswear company Nike reportedly plans to cut more than 1,600 jobs, saving the firm about $2 billion in costs. According to a report by the Wall Street Journal, those cuts will spare retail, distribution, and innovation staff. The moves come after Nike slashed its sales outlook in December due to weakening consumer demand.
Nike is far from alone in its efforts to curb expenses. Tech companies, including Google parent Alphabet, Facebook, and Snap, all made cuts last month, while financial firms like Citigroup and Amazon announced plans to trim their workforces.
The number of job cuts announced in January was up 136% from December and the second-most of any month in January since the aftermath of the financial crisis in 2009, according to outplacement firm Challenger, Gray, and Christmas. The cuts continued into February, with a total of 77,770 positions cut.
Some of the most notable announcements include Google parent Alphabet laying off workers in its X lab as it adopts a new structure that will help projects spin out into independent businesses even faster, Bloomberg reported. How many jobs will be lost in the transition is still being determined. Amazon also trimmed its workforce, telling employees it would “eliminate several hundred roles” in its Prime Video and MGM Studios divisions.
Those job cuts were followed by more than 28,000 in the financial sector. That is the industry’s highest monthly total in over a decade. It follows a challenging quarter for the sector, which saw lower-than-expected earnings from banks, brokerages, and asset managers.
Other sectors that saw significant job cuts include food production, transportation, and telecommunications, where high input prices and labor shortages hurt profits. Companies in those industries have been cutting back to compensate for a lack of demand while slashing costs as they try to survive the rate volatility plaguing the economy this year.
Despite the bleak picture, analysts are still optimistic that the U.S. economy will continue to grow this year. But it will be a much slower pace than last year’s near 4% growth. As the year progresses, keeping an eye on rising inflation and interest rates will be necessary, which could slow hiring as the economy cools off. And with a fading global economy, some experts warn that more mass layoffs may be on the horizon.