As companies continue to combat the surging inflation rate, a wave of layoffs has swept across businesses, as TV host Jim Cramer predicts more layoffs once the holiday season is over.
Cramer discloses that the current high-inflation economy has negatively impacted a lot of businesses, as they are currently faced with slow business growth while labour costs keep increasing. This has forced companies across a variety of industries to slash headcount.
In his words,
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“I’m sure there’ll be many layoffs after Christmas. I don’t want to finger-point at the retailers who’re most likely to be thrown into bankruptcy when the holidays are over, but I do want people to realize that, in a way, our current high-inflation economy is a high-quality problem.”
As inflation continues to rise in the U.S., a large number of companies across industries have been forced to trim their workforce this year to control their expenses due to the unfavorable economy.
The tech industry has been massively impacted as analysts disclosed that Tech job cuts are on pace to reach early pandemic levels.
Employees of technology companies have been particularly at risk of layoffs due to the industry having overhired amid the economic recovery following the onset of COVID-19.
Now these companies are dealing with the costs of all that hiring, and the wave of job cuts indicates that keeping payrolls low is the priority.
According to a Crunchbase report, more than 88,000 workers in the U.S. tech sector have been laid off in mass job cuts so far in 2022, while more than 105,000 people have lost their jobs at private startups this year.
Tech companies such as Twitter, Snap, Meta, Peloton, Seagate Technology, Microsoft, Amazon, Shopify, etc have all laid off a large amount of their workforce.
Even traditionally layoff-resistant companies like Netflix have slashed headcounts, with more companies preparing to lay off some of their workforces after the holiday period.
American multinational information technology company, HP Inc. plans to reduce its global headcount by approximately 4,000 to 6,000 employees by the end of 2025, which the firm disclosed in its fourth-quarter earnings release.
The tech sector isn’t the only industry that has recorded massive layoffs. The real estate industry is also feeling the heat as low inventory, high home prices, and rising interest rates have slowed housing sales.
As a result, thousands of workers who were employed amid the pandemic recovery’s booming housing market are now facing widespread layoffs, with real estate companies warning of further cuts ahead.
While Cramer predicts that more layoffs will occur after the festive season, some companies do not want to wait till that period as they are evaluating plans for the 2023 fiscal year.
Rather than wait for the holiday season to be over, these companies are already planning for 2023 by slashing headcount before entering the new year.