The pace of job cuts by U.S. employers accelerated in March, with the number of layoffs climbing 15% from just one month ago, according to a report published on Thursday by Challenger, Gray & Christmas.
Companies announced 89,703 job cuts in March, with technology companies leading the way, the analysis showed. That is 319% higher than the same time one year ago.
So far this year, employers announced plans to cut more than 270,416 jobs, a 396% increase from the nearly 55,696 cuts announced in the equivalent time period last year. It is the highest quarterly total since the spring of 2020, when the economy was still in the throes of the COVID-19 pandemic.
ARE TECH LAYOFFS THE CANARY IN THE US JOBS MARKET?
“We know companies are approaching 2023 with caution, though the economy is still creating jobs,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas. “With rate hikes continuing and companies’ reigning in costs, the large-scale layoffs we are seeing will likely continue.”
A growing number of companies, particularly in big tech, are battening down the hatches as they warn of a grim economic outlook.
Alphabet, 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 raises interest rates at the fastest pace in decades in order to combat inflation. The tech industry has already slashed about 102,391 jobs so far in 2023, a stunning increase of 38,487% from just one year ago.
JOBLESS CLAIMS COME IN HIGHER THAN EXPECTED AHEAD OF MARCH JOBS REPORT
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.
Projections from the central bank’s March meeting show that officials expect unemployment to rise to 4.6% by the end of next year, up from the current rate of 3.5%. That could mean more than 1 million Americans lose their jobs between now and the end of the year.
Policymakers have already approved nine consecutive rate increases and have opened the door to a 10th increase at their next meeting in early May, although they have stressed the importance of upcoming economic data releases.
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That includes the March jobs report, which will be released early Friday and is expected to show that employers hired 240,000 workers following a gain of 311,000 in February.
The unemployment rate is projected to hold steady at 3.6%.