Balkans | Companies in Europe and the United States continue to lay off workers amid recession fears

Unusually high inflation in Europe and the United States and recession fears arising from high interest rates force companies to restructure, and this situation continues to cause layoffs.

On the occasion of May 1 Work and Solidarity Day, AA Reporter has compiled the situation in sectors where layoffs are common, especially tech companies, and the world of work, along with ILO data.

After rising inflation and interest rates, layoffs became a global problem due to recession fears. Within the scope of the restructuring plan, especially major technology companies, the trend of layoffs continues in companies from other sectors in order to reduce costs.

Companies from the technology, finance, real estate, media, telecom, automotive and chemistry sectors explain how many people they will lay off and what policies they have set in that direction.

While the recession that began in the global economy with the Covid-19 process has not yet lost its impact, fears of inflation, high interest rates, high energy prices and geopolitical problems affect the production of companies and cause fluctuations in the markets.

While there has been an increase in e-commerce expenditures during the pandemic process, technology companies in particular have increased their job purchases. However, in the face of soaring inflation and soaring interest rates post-pandemic, tech companies are going through tough times as consumers’ spending capacities decline.

This situation, combined with technology, is depressing sales for other large and small companies, with companies being pushed to reduce their workforce.

Rapid interest rate increases, weak consumer demand and declining profit rates are prompting major investment banks, along with companies like Amazon, Meta and Google, to shrink their workforces, as they did last year.

With the evaluation of new technologies, especially artificial intelligence, in many areas, the need for some jobs is fading away, and this situation opens the door for companies to reduce the number of employees.

While the energy crisis escalated with the Russian-Ukrainian war leading to a global economic recession, it affects the workforce policies of many companies, especially in the USA, Europe and Asia.

Layoffs in the United States increased 319 percent year-on-year

It’s worth noting that while companies like Amazon, Meta, and Twitter laid off thousands of their employees last year, other tech companies have also tried to reduce hiring.

According to a March report by consulting firm Challenger, Gray & Christmas, which tracks layoffs announced or confirmed by companies in the areas of telecommunications, electronics and software development, layoffs in the United States increased 319 percent year-over-year. year.

In March, US employers announced that they were laying off 89,703 jobs, an increase of 15 percent compared to February. This number was recorded as the highest in the first quarter since 2020, when the pandemic began.

According to a report published by Challenger, Gray & Christmas earlier this year, job advertisements in the United States reached 44,000 in December last year, up 129 percent from last year. Last year, about 364,000 layoffs were announced, an increase of 13 percent from 2021.

The US auto industry was the second sector to report the most layoffs with 30,912 people last year. Health sector companies also announced layoffs of 30,626 people in the same period.

A layoff plan for 168,000 people has been announced

While the wave of layoffs continues to increase rapidly this year, according to data from Layoffs.fyi, which monitors layoffs in the tech sector, tech companies reported nearly 168,000 workforce cuts in 2023 alone.

Amazon said last month that it plans to lay off about 9,000 employees, most of them from AWS, PXT, Twitch and its advertising divisions. After announcing 10,000 layoffs last year, Amazon laid off more than 18,000 people in January.

Meta, owner of Facebook, Instagram and WhatsApp, announced in March that it plans to lay off another 10,000 employees. Meta announced in November last year that it would lay off more than 11,000 employees.

Microsoft, an American technology company, announced its plan to lay off 10,000 people, equivalent to about 5 percent of its employees, by the end of the third quarter of the year.

Alphabet, the parent company of US tech giant Google, has announced that it will lay off 12,000 employees in January.

Earlier this year, Sweden-based audio and podcast streaming service Spotify decided to reorganize the company to provide greater efficiency, manage costs and speed up decision-making. In this context, the company announced that it will lay off 6 percent of its employees.

While US-based automaker Ford announced in February that it would lay off nearly 3,800 employees across Europe due to the global auto industry’s shift to electric vehicles, Ireland-based technology consultancy Accenture announced that it plans to lay off 19,000 employees. in March.

Germany-based software company SAP has announced that it will launch a restructuring program this year that will reduce global headcount by 2.5 percent. Berlin-based express delivery company Flink announced on April 24 that it had cut its workforce rate by 40 percent, laying off 8,000 employees.

The “job losses” in the COVID-19 crisis are not expected to return to normal until 2025

According to the ILO report, Global Employment and Social Outlook: Trends for 2023, the global economic slowdown will force workers to accept low-quality, low-paying jobs without job security or social security. Plan.

Global employment growth in 2023 is expected to remain at 1 percent, less than half of 2022 levels.

Global unemployment is expected to rise to 208 million people (5.8 percent) in 2023, which would add about 3 million unemployed.

While Europe and Central Asia have suffered greatly from the economic effects of the Russo-Ukrainian War, employment is expected to decline in 2023. Due to limited increase in the working-age population, unemployment rates are expected to rise slightly.

Richard Samans, Director of Research at the ILO, commented in the report: “The slowdown in global employment growth means that we should not expect to recoup the losses from the COVID-19 crisis before 2025. The slowdown in productivity growth is a big problem. It is something It is indispensable in resolving the interrelated crises we face in the areas of productivity, purchasing power, environmental sustainability and human well-being.” Use phrases.

Layoff announcements came last year, too

In the past year, tech giants like Meta, Twitter, Cisco, and Philips have laid off workers. Cisco and Philips have announced plans to lay off about 4,000 people.

In the US, companies such as Netflix, Robinhood, Snap, Shopify, Peloton, and Calm have previously announced that they will cut staff.

Netflix announced it would cut 450 employees, while Peloton announced it would cut more than 800 jobs, cutting Robinhood by 23 percent, Snapchat by 20 percent, Shopify by 10 percent, Cameo by 25 percent, and Calm by 20 percent.

AA