Some of the biggest companies in the U.S. are facing massive layoffs this year as well as slashing salaries for big executives.
Many employees began to get laid off since the last quarter of 2022.
However, the trend continues into 2023 as a recession looms.
The workforce is expected to shrink for majority of the year according to Bank of America economists.
“There is a slowdown happening, there is no question about it. We are expecting a fairly weak economy throughout the entire year,” said Wells Fargo CEO Charlie Scharf.
Which companies are laying off employees in 2023?
- PayPal – 2,000 employees
- FedEx – More than 10% of its workforce
- Ford – 3,200 employees
- Amazon – 18,000 employees
- Wayfair – 10% of its workforce
- Goldman Sachs – 3,200 employees
- Twitter – 7,700 employees
- Microsoft – 10,000 employees
“A recession is very likely in the U.S.,” BoFa wrote in its Year Ahead 2023 report. The bank points out that this recession can last through the third quarter of 2023.
There’s no official definition of a recession, but many economists define it as a period of two consecutive quarters of negative economic growth or gross domestic product (GDP) decline – a drop that’s already been seen in 2022, says FOX Business.
But many Americans already believe the U.S. is already in a recession.
Nearly 77% of market participants said they expect a recession in 2023 with many arguing the U.S. economy has already been in one since last year.
Do you think we will go into a recession this year?
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1. PayPal – 2,000 employees
The cuts account for around 7% of the company’s workforce and will take place over the next few weeks, CEO Dan Schulman said in a statement.
Schulman emphasized that the company was operating in a “challenging macroeconomic environment,” and said that while the company had made progress getting its cost structure under control, it had “more work to do.”
The CEO wrote that laid-off workers would be given severance and support after they departed the company.
“We will treat our departing colleagues with the utmost respect and empathy, provide them with generous packages, engage in consultation where required, and support them with their transitions,” he wrote. “I want to express my personal appreciation for the meaningful contributions they have made to PayPal.”
2. FedEx – More than 10% of its workforce
FedEx announced plans on Wednesday to cut 10% of its officer and director team, one day after PayPal, HubSpot and HarperCollins announced rounds of layoffs—making them the latest U.S. companies to reduce their head counts as recession fears linger into 2023.
The company employs approximately 547,000 people.
Employee layoffs are reported to be full-time positions with at least 90 FedEx office locations closing this year.
3. Ford – 3,200 employees
Ford Motor Co. plans to cut about 3,200 jobs across Europe, following workforce reductions in the US as the automaker slashes costs in a shift toward electric vehicles.
The European cutbacks come after Ford already eliminated 3,000 jobs primarily in the US in the second half of last year.
Chief Executive Officer Jim Farley is targeting $3 billion in cuts as he seeks to boost profits from traditional internal combustion engine models to help finance the $50 billion he is pouring into developing electric vehicles.
“We absolutely have too many people in some places, no doubt about it,” Farley told analysts in July after Bloomberg broke the news of the coming job cuts. “We have skills that don’t work any more, and we have jobs that need to change.”
4. Amazon – 18,000 employees
Amazon’s 18,000-plus job cuts announced this month are being felt broadly across the company’s sprawling operations, from physical retail technology and grocery stores to robotics and drone delivery, and even in cloud computing.
That’s according to a spreadsheet created after the layoff announcement by an employee, who has encouraged those affected to submit their information for use by recruiters. The database, which was circulated widely on LinkedIn, provides a window into the businesses hit with layoffs.
CEO Andy Jassy wrote in a blog post in early January that “several teams” were impacted but that the cuts would primarily be centered in Amazon’s worldwide stores and human resources divisions.
Beyond that, the company provided scant details on where downsizing would take place in 2023.
5. Wayfair: 10% of its workforce
Wayfair’s stock price jumped more than 20% last Friday after the retail giant said it will let go of roughly 1,750 employees, or 10% of its global workforce, to support company-wide cost reductions.
The announcement marks Wayfair’s second round of job cuts in less than six months since the retailer let go of about 5% of its workforce in August.
Executives expect the two rounds of layoffs will save $750 million a year, according to a press release.
6. Goldman Sachs – 3,200 employees
Goldman Sachs said on Jan. 17 it had laid off around 3,200 employees as part of a headcount reduction, per Reuters.
The bank said its board had awarded Chief Executive David Solomon compensation of $25 million for his work in 2022, compared with $35 million the previous year.
This comes to a reduction of approximately one third.
Morgan Stanley also paid less to Chief Executive James Gorman, though only by 10%.
Bank of America, one of the largest banks in the U.S. is also preparing to trim its workforce in an effort to cut expenses over fears of a looming recession.
7. Twitter – 7,700 employees
Twitter had laid off 7,700 employees after the Musk takeover.
The company plans to lay off 50 workers in the social media site’s product division in the coming weeks, news site Insider reported on Wednesday, citing two people familiar with the company.
The layoffs, which come six weeks after top boss Elon Musk reportedly told staff that there would not be further retrenchment, could reduce the company’s headcount to under 2,000, according to the report.
However, Elon Musk also confirmed Twitter would be hiring some at some point to which he did not specify in 2023.
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8. Microsoft – 10,000 employees
The job cuts, which amount to less than 5 percent of the company’s work force, are its largest in roughly eight years.
Microsoft on Wednesday became the latest addition to a growing list of big technology companies that have announced plans to lay off employees because of over hiring during the pandemic and worries about the economy.
The company will lay off 10,000 workers, Satya Nadella, Microsoft’s chief executive, said, as it looks to trim costs amid economic uncertainty and to refocus on priorities such as artificial intelligence.
Microsoft employed about 221,000 workers as of the end of June, and the cuts amount to less than 5 percent of its global work force.
JPOW says no recession
Jerome Powell said on Wednesday’s FOMC day to expect soft layoffs but no recession.
Powell says that the disinflationary process has started, stating he’s confident inflation back down to 2% is possible, but this means keeping rates higher for a longer period of time.
The fed says it expects the economy to have positive but suppressed growth in 2023, at least +1%.
I’m curious to hear your thoughts on the economy this year.
All signs point to a recession, is the fed prolonging official announcements?
Leave a comment below.
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Powell says no recession for 2023. Do you agree?