BUCKLE UP! THE 2023 JOB MARKET IS GONNA BE A BUMPY RIDE

If you believe the news, anyone and everyone is in danger of being laid off any day now. Of course, if you believed the news, you’d think the world was ending tomorrow.

We don’t dispute there was a surge of layoffs in Q4. However, it’s important to look closely at who is laying off and why. Upon a closer look, there were the?biggest layoffs?from the biggest companies, many of whom are in the?tech sector: Amazon, Salesforce, Vimeo, DoorDash, Twitter, Zillow, and Meta, to name a few. Now, to answer the second question – Why?

These organizations saw some of the largest (often overzealous) hiring in late 2020 through 2022. The demand for their services surged during the pandemic, and valuations soared. Companies responded and scrambled to fill the needs, hoping (and assuming) that demand would continue indefinitely. They were wrong. (We’re talking to you, Peloton.)

Additionally, the fear of an impending recession and a rollercoaster-like stock market hit the marketplace hard. Zillow released 5% of its workforce due to declines in the housing market, and Carvana laid off 2,500 people (via Zoom, by the way) due to a recession in auto sales.

These kinds of numbers are naturally going to cause a panic, but there’s one more thing to consider: What does the staff size look like when compared to pre-covid? You’ll find that many organizations are actually ringing in 2023 larger than their pre-covid size.

What about the little guys? As a boutique,?retained executive search firm, we have the finger on the pulse of small to mid-sized companies. After speaking to leaders at dozens of those companies, we saw something very different than what the news is reporting. Rather than laying off existing employees, many are simply implementing a hiring freeze… for now. Retaining their staff, avoiding restructuring, and retrenching is their top priority. The best way to accomplish this is to secure those employees and put off bringing on new ones. Will the freeze-thaw? Most definitely. When? No one is sure.

Cutting 363,824 jobs (up 13% from the 321,970 cuts announced in 2021) is no joke – especially to the people being cut. But it’s important to put those numbers in the right light. Large companies with over-eager hiring over the last few years are having to make big changes in the face of a recession. However, many still come out ahead of the retention game compared to pre-covid years. While the small to mid-sized players continue to fight to hang on to the people they have and temporarily sideline their recruiting efforts.

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