Companies including Microsoft Corp, Amazon.com Inc and Goldman Sachs Group Inc cut thousands of jobs last month in an attempt to weather the storm of falling demand. as consumer and business spending shrinks due to high inflation and rising interest rates.
“We are now on the other side of the hiring frenzy of the pandemic years,” said Andrew Challenger, vice president of the firm that authored the report. “Businesses are preparing for an economic downturn by cutting staff and slowing down hiring.”
The pressure to correct the excesses of the pandemic has been most evident in the technology sector, which cut 41,829 jobs last month, the most of any sector.
Retail, second only to technology, cut 13,000 jobs in January, compared to virtually no layoffs a year earlier. Financial companies, for their part, cut 10,603 jobs last month, compared to 696 the previous year.
With the Federal Reserve expected to continue raising rates to curb inflation that remains high after several rounds of hikes, analysts say US companies could face more layoffs.
“Companies that have increased their workforces in recent years will likely reduce them as the economy heads for a rough patch,” said Edward Moya, an analyst at OANDA.