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Layoffs are infecting other industries after tech sector employers, including Alphabet, Amazon, Microsoft, and Salesforce already have chopped hundreds of thousands of workers off their payrolls.
Michigan-based Dow Chemical announced a 2,000-worker cut last week, blaming a slowing economy for the company’s 32.5-percent drop in earnings last year.
The company will also close plants in Europe, turfing out workers there, although the number and location of the factories have not been specified.
Also last week, toy and board game giant Hasbro said it will bid goodbye to 1,000 workers as part of its plan to cut $250 million to $300 million in costs over the next three years.
Hasbro’s stock lost about half its value through 2022.
Other layoffs recently announced:
● Discount retailer Saks Off 5th will dump an unspecified number of employees;
● Saks.com will rid itself of about 100 workers;
● Stitch Fix put 20 percent of its salaried workers out on the street and closed a Utah distribution center;
● Wayfair is lopping 1,750 people, about 10 percent of its payroll;
● 3M will erase 2,500 manufacturing jobs in anticipation of slowing sales and lower profits in the months ahead.
Disney is expected to reveal plans to shrink its workforce as part of a restructuring plan early next month.
The layoffs come amid steadily shrinking consumer spending on goods, which fell by 0.2 percent in December. (See “Consumer Spending Slips in December” in this issue.)
Consumers are buying less merchandise as rising interest rates make the purchases of homes, cars, and other items requiring loans more expensive. Consumers are cutting back in other areas as well, although spending on services remains strong.
Layoffs also continue in tech, with Intel shaving off 378 workers from its headquarters office and German software firm SAP firing 3,000 workers company-wide.
Also, General Electric is shedding 2,000 workers from its wind turbine operation; IBM will eliminate 3,900 jobs.
The silver lining: many of the layoffs touch only small fractions of the companies’ labor force. IBM’s loss amounts to about 1.4 percent of its workers, SAP’s 2.5 percent.
The economy tacked on 223,000 jobs in December, the smallest monthly gain in two years. The number will shrink to 150,000 this month, less than the pre-COVID monthly average, analysts at Capital Economics predicted.
Last month, 826,000 workers had been jobless for three to six months, a sharp increase from April’s 526,000.
Not all employers are shedding workers.
The Chipotle restaurant chain has said it plans to add 15,000 permanent, part-time employees earning $11 to $18 an hour, depending on the location. Airbus will expand its staff by 13,000.
TREND FORECAST: Job losses spreading more widely across the economy adds momentum to the general economic slowdown underway and adds weight to our forecast that a recession awaits in the second half of this year. Again, as the Fed raises interest rates the economy will decline and unemployment will rise. And for more details on the job loss trend see: “WHEN THE ECONOMY FALLS JOBS GO WITH IT.”