US Layoffs Reach Two-Year High in Push for Profitability

New figures from the Labor Department show U.S. layoffs reaching their highest level in more than two years.

The March Job Opening and Labor Turnover Summary, released Tuesday (May 2), also show new job openings declining.

Job losses increased to a seasonally adjusted 1.8 million in March, versus 1.6 million in February, driven by layoffs in the construction, professional services, leisure and hospitality and health and education sectors.

Meanwhile, employers reported 9.6 million job openings for the month. As noted here last month, that number hasn’t fallen below 10 million since May 2021.

As PYMNTS wrote earlier this week, companies are seeking to preserve operating margins and please profitability-focused investors, which has led to staffing reductions at businesses that expanded their headcounts during the pandemic.

For example, Meta is laying off another 10,000 employees after slashing 11,000 jobs in November and pausing hiring for another 5,000 roles that had been open.

Amazon is set to lay off another 9,000 employees in an ongoing series of job cuts that included 18,000 positions cut in January, and Lyft is cutting its staff by 26% as the rideshare company looks to gain “operating cost savings.”

However, the shift is also happening in other industries as well, with companies ranging from manufacturer 3M, retailer Gap and Wall Street bank Lazard all cutting jobs.

As noted here last week, Gap said in a regulatory filing that it is letting go of 1,800 workers as it looks to lower its expenses, simplify and optimize its operating model and structure, and shed layers of management for improved quality.

The Labor Department’s figures follows last week’s release of the Bureau of Economic Analysis (BEA) Q1 2023 GDP advance estimate report, indicating that a “tumultuous economic landscape may be ahead for a while longer,” as PYMNTS wrote.

The report shows U.S. economic growth slipping for the third consecutive quarter, from 3.2% in the third quarter of 2022 to 1.1% in the first quarter of 2023. Consumer spending, a major GDP factor, has shrunk in recent months as many shoppers continue to scale back spending on inessential items.

“This consumer spending pullback has been steadily growing, starting with the pandemic and ratcheting up as inflation tightens most shoppers’ belts and SNAP cuts affect major retailers’ bottom lines,” PYMNTS noted.