U.S. job market split boosts some workers’ prospects, keeps others in the spotlight
Wanted help sign is displayed in the window of a business in Brooklyn, New York.
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Cracks are forming in US labor market because some companies seek to limit hiring while others are desperate for employees.
Microsoft, Twitter, Wayfair, Snap and Facebook-parents Meta recently announced that it plans to be more cautious in adding new employees. Peloton and Netflix announced ax when the demand for their products slows down and car sellers online Carvana cut its workforce as it faces inflation and falling stock prices.
“We will treat hiring as a privilege and consider when and where we add staff,” he said. Uber owner Dara Khosrowshahi wrote to staff earlier this month, committed to reducing costs.
US-based employers reported more than 24,000 job cuts in April, up 14% from the previous month and 6% higher than in the same month last year, according to Challenger replacement company Gray & Christmas.
But airlines, restaurants and others still need Fill in the positions. Job cuts in the first four months of the year fell 52% year-on-year in 2021. Just under 80,000 jobs were cut between January and April, the lowest number in nearly three decades the company tracked. data tracking.
What is emerging is a tale of two job markets – albeit unequal in size or wages. Hospitality and other service sectors are unable to hire enough workers to staff, what is expected to be a bustling recovery in the summer after two years of Covid obstacles. Technology and other big employers are warning that they need to cut costs and put employees in the spotlight.
Record job opportunities
WE job opportunities spiked to a seasonally adjusted 11.55 million at the end of March, according to the latest Labor Department report available, a record of data dating back to 2000. The number of employees quitting also hit a record level. continent, more than 4.5. million. Tenants stood at 6.7 million.
Salary is rise but not enough to keep up inflationary. And everyone is change where they spend their money, especially as household budgets tighten thanks to a four-decade high in consumer prices.
Economists, employers, job seekers, investors and consumers are looking for signals on the direction of the economy, and are spotting emerging divisions in the labor market. . The difference could mean slowing wage growth, or hiring itself, and could ultimately cut back on consumer spending, which is already strong despite waning consumer confidence. reduce.
Companies from airlines to restaurants large and small still can’t hire fast enough, which forces them to cut growth plans. Demand rebounded faster than expected after those companies workers leave work while sales caused by the pandemic.
JetBlue Airways, Delta Airlines, Southwest Airlines and Alaska Airlines yes shrink growth plans, at least in part, because of staff shortages. JetBlue says the pilot’s consumption is higher than normal and is likely to continue.
“If your attrition rate is 2 to 3 times higher than what you’ve seen before, then you need to hire more pilots just to stand still,” JetBlue CEO Robin Hayes said at a conference investors May 17.
According to Pam Decant, Denver International Airport’s senior vice president of franchising, Denver International Airport’s franchise operations have made progress in hiring, but are still short of between 500 and 600 workers.
She said many chefs are making around $22 an hour, up from $15 before the pandemic. Airport recruiters are offering recruitment, retention, and in at least one case, she calls “if you show up to work every day this week.”
David Tinsley, an economist and director at Bank of America, said consumers “have spent a lot on goods and not on services as much during the pandemic and now we see in our card data, they’re flying back to services, literally”. Academy.
“It’s a little shaken from those who can [had] He talks about current trends.
Capture
The companies that led the way in job growth were the ones hardest hit in the early part of the pandemic.
Jessica Jordan, managing partner of Rothman Food Group, is having a hard time hiring the workers she needs for her two Southern California businesses, Katella Deli & Bakery and Manhattan Beach Creamery. She estimates that the two have only about 75% staff.
But half of the applicants never replied to her emails for an interview, and even new hires who submitted their paperwork often disappeared before their first day without a call. explained, she said.
“I’m working really hard to hold their hand through every step of the process, just to make sure they get there that first day,” says Jordan.
Larger restaurant chains also have high hiring orders. Sandwich chain Subway, for example, said on Thursday that it is looking to add more than 50,000 new workers this summer. Taco Bell and Inspire Brands, which owns Arby’s, said they were also looking to add staff.
Hospitality and food service had the highest quit rates of any industry in March, with 6.1% of workers quitting, according to the Bureau of Labor Statistics. The overall quit rate was just 3% that month.
Some of those workers are leaving the hospitality industry altogether. Julia, a 19-year-old living in New York City, quit her restaurant job in February. She said she left because of hostility from both her clients and her boss and too many overtime shifts added to her schedule at the last minute. Currently she works in the field of child care.
“You have to work really hard to get laid off in this economy,” said David Kelly, global chief strategy officer at JP Morgan Asset Management. “You have to be really incompetent and obnoxious.”
Recession in Silicon Valley
And if recovering industries are hiring to catch up, the reverse is also true.
After a hiring boom, several major tech companies announced hiring freezes and layoffs as concerns about the economic downturn, the Covid-19 pandemic and the war in Ukraine hampered plans to increase growth. chief.
Well-funded startups aren’t immune either, even if they don’t suffer market value declines to the same extent as public tech stocks. At least 107 technology companies have laid off employees since the beginning of the year, according to Fire.fyitrack job cuts across the industry.
In some cases, companies like Facebook and Twitter is canceling Job offers after new hires have been accepted, leaving workers like Evan Watson in a precarious position.
Last month, Watson received a job offer to join the diversity and emerging talent department at Facebook, which he calls one of his “dream companies.” He made the announcement at the real estate development company where he works and set a start date at the social media giant for May 9.
Just three days earlier, Watson received a call about his new contract. Facebook was announced recently it would halt hiring, and Watson anxiously speculated that he might receive bad news.
“When I got the call, my heart sank,” Watson said in an interview. Meta has frozen hiring, and Watson intro is off.
“I just kept silent as if. I really have no words to say,” said Watson. “Then I said, ‘Now what?’ I don’t work at my other company.”
The news disappointed Watson, but he said Facebook offered to pay him off while he looked for a new job. Within a week, he got a job at Microsoft as a talent scout. Watson said he “feels pleased” about joining Microsoft, where the company is “a lot more stable, in terms of stock price.”
For months, the retail giant Amazon pendant Generous login bonus and free college tuition to attract workers. The company has hired 600,000 people since the start of 2021, but now it finds itself in excess of its fulfillment network.
Many recent employees of the company are no longer needed, with e-commerce sales growth cools down. Plus, employees who took sick leave amid a surge in Covid cases returned to work earlier than expected, Amazon CFO Brian Olsavsky said on a call with analysts last month.
Amazon spokesperson Kelly Nantel told CNBC: “Now that demand has become more predictable, there are sites in our network that are slowing down or pausing hiring to better align with the needs of the company. our operational needs”.
Amazon did not respond to questions about whether the company foresees layoffs in the near future.
Recession Shield
Hiring cuts and changes are isolated for now, but they do have some executives being active.
Bank of America’s Tinsley said: “Any kind of news…when companies get their big names around job loss, has the potential to dampen sentiment a bit,” said Bank of America’s Tinsley. said, while warning that the job market remains strong. “Things are probably not as bad as the picture some people might paint.”
However, he said job growth in the services sector is likely to start to slow.
JPM’s Kelly says that even if the market loses 3 million openings, it’s still a jobseekers market.
“There’s a strong excess of demand for workers,” he said. “It really protects the economy from a recession.”
But job cuts could spill over into other areas.
A sharp rise in hiring freezes, job cuts, stagnant wages or even reduced corporate spending on things like employee benefits and a return to business travel could hurt. It harms the very service industries that have thrived as Covid cases drop.
“The question is ‘Will consumer spending keep above the water? “” Tinsley said.
– by CNBC Jordan Novet contributed to this story.
