US companies planned 721,677 job cuts last year, a 98% jump from 363,832 layoffs reported in 2022, a new report published by professional outplacement firm Challenger, Gray & Christmas has revealed. Several high-profile tech companies, including Meta and Amazon, slashed jobs last year. Around 168,032 employees were laid off in 2023, which is a stunning 73% increase from the previous year, the report said. Experts now believe that this problem could worsen in 2024 as the labour market continues to soften in the face of high-interest rates and stubborn inflation.
"Labor costs are high," said Andy Challenger, senior vice president of Challenger, Gray & Christmas. "Employers are still extremely cautious and in cost-cutting mode heading into 2024, so the hiring process will likely slow for many job-seekers and cuts will continue in the first quarter," he added, as per Fox News.
Mr Challenger went on to say that the "tech sector will continue to be impacted by the onset of AI, mergers and acquisitions, and realigning of resources and talent".
According to the report, retail companies also accounted for a large swathe of the job cuts last year, slashing 78,840 positions. That marks a 274% increase from the layoffs announced in the sector during the same period one year prior, the report revealed. Mr Challenger said retailers need to "be on their toes" this year, even though many companies exercised caution and flexibility in their hiring.
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Healthcare and product manufacturers, including hospitals, also cut a significant number of jobs. They eliminated 58,560 positions in 2023, a 91% increase from the layoffs announced in 2022, as per the report.
Deteriorating market and economic conditions in the US have been cited as top reasons for job cuts last year, the outlet said, adding, several companies also blamed stores closing, bankruptcy and artificial intelligence for the layoffs.
Meanwhile, another survey conducted by Challenger, Gray & Christmas showed that 34% of employers didn't give out bonuses in 2023, up from the 27% that didn't award company bonuses in 2022. This is the highest rate since 2019 when 36% of companies decided not to give their workers bonuses, the report released last month said.
