At the same time companies announce mass layoffs, other businesses can’t hire employees fast enough.
- Industry giants like Amazon, Meta Platforms, and Disney have announced additional job cuts over the last several weeks. Around 103,000 U.S. jobs were cut in January, CNBC reports.
- At the same time, around 517,000 jobs were added last month—nearly triple what experts had predicted.
- The seemingly contradictory market comes about as the tech industry and similar businesses struggle while other sectors are still climbing back from pandemic-induced lows.
- Service industries like hotels and restaurants were particularly affected by COVID lockdowns. Now, these businesses are still struggling to revive, in part because they need additional staffing.
- The strong disparity between the job markets in different industries makes predicting the U.S. economy more complicated than usual.
Why it’s news
Industries have different struggles following the pandemic. Tech companies are looking to cut costs and save money while service industries are still scrambling to hire employees. The result is a weak labor market in some areas and a tight market in others.
However, some experts warn that continuing high interest rates could cause the weak labor market to spread to other industries, CNBC reports. Service industry leaders have had difficulty retaining staff due to competition from other employers that offer better schedules and higher pay. As the cost of living has risen, employees are increasingly motivated by pay increases.
The tech industry’s struggles could trickle into service industries. As layoffs continue and inflation prompts consumers to cut back on spending, service industries could see a revenue decline.
Backing up a bit
Tech giants like Amazon and Microsoft have recently announced layoffs, despite significant growth during and shortly after the pandemic. Last month Amazon announced 18,000 layoffs. Microsoft is releasing around 5% of its staff—10,000 employees.
In contrast, Boeing announced that it would be hiring an additional 10,000 employees this year. These new positions will be primarily focused on the manufacturing and engineering divisions of the company. Corporate layoffs, however, are still coming. Boeing plans to reduce its corporate staff by 2,000—predominantly in the human resources and finance departments.
Boeing’s focus on adding new engineering jobs is likely related to its new deal with Air India.