2023: The Year of Job Losses?
Will 2023 be the year of Job Losses? Are we heading into a time that’s equal to or worst than the Great Recession of 2008? What if it will be as bad as the Great Depression? Could there be a saving grace and we are ultimately spared the worst?
We are aware that our readers are well informed and have been keeping up to date with what’s been going on in the economy, the aviation industry, and in particular as it relates to jobs. Here’s an important question: Will 2023 be the year of job losses?
The above question is important for two reasons. First, the Federal Reserve believes that a hot job market (a job market where unemployment is low) helps to cause high inflation. — full disclosure, we disagree with this. Therefore, the Federal Reserve will be doing what it takes to increase unemployment which it believes will reduce inflation. That means many more people will be out of work. Second, there were a lot of malinvestments- investments in businesses and ventures that would not have occurred under normal market conditions — due to the Federal Reserve keeping interest rates low. As interest rates rise companies and investors will find it prudent to reduce those prior investments and re-calculate where they put money. This means that a lot of the jobs that were created as a result of those malinvestments will be destroyed.
The big challenge here is that the two factors laid out above are not isolated in any one segment or industry within the U.S. or global economy. This goes for all industries and segments. Nonetheless, we will see their effects first in some key segments such as Tech and Housing, but rest assured they will work their way through the entire economy to include the aviation industry.
It is also interesting to note that we are constantly told that jobs are important on one hand but on the other hand there are factors — some deliberate and others not so much so — that are at work to destroy jobs. The truth is that these malinvestments need to work their way out of the economy as they should not have been there in the first place. However, this does not mean that it won’t be painful for those who in good faith took on jobs they believed will be there for many years to come.
In this two-part issue, we share some insights into what has been going on In the job market since the start of this year. Highlighting the fact that in terms of layoffs, this year so far is worse than the same period last year.
For related readings, please see also: ‘Aviation: Jobs Jobs Jobs!’, ‘Aviation: Making Ends Meet’, ‘Why is it More Expensive to Give Thanks?’, ‘Lowering Real Wages | Increasing Debt’, ‘Labor: Should I Participate?’, ‘Jobs “Boom” : Is it really?’, ‘Aviation: Can We Be Frank About The Jobs Market?’, and ‘Aviation: Are Our Retirements At Risk?’
Job Cuts 400% Higher Than Same Time Last Year
Major employers all over America are announcing mass layoffs, but the mainstream media continues to insist that everything is just fine. Every month the Biden administration gives us numbers that suggest that the economy is stable, and most mainstream reporters willingly go along with that narrative. But anyone with half a brain should be able to see that we are headed for big economic trouble. The housing bubble is imploding, food prices just keep rising, and we haven’t seen a wave of layoffs like we are currently witnessing since the days of the Great Recession.
One of the things that I appreciate about Challenger, Gray & Christmas is that they don’t have a political axe to grind. They just report the facts, and their latest report tells us that announced job cuts in the United States are running 427 percent higher than they were at this time in 2022…
So far this year, employers announced plans to cut 180,713 jobs, up 427% from the 34,309 cuts announced in the first two months of 2022. It is the highest January-February total since 2009 when a total of 428,099 job cuts were announced in January and February.
Let those figures sink in for a moment.
When the number of planned layoffs is running 427 percent higher than a year ago, your economy is moving in the wrong direction very rapidly.
And the latest report from Challenger, Gray & Christmas doesn’t even include any of the job cut announcements that we have seen so far in March.
For example, it is being reported that General Motors will be offering a “voluntary” exit to the majority “of its 58,000 U.S. white-collar employees”…
General Motors will offer voluntary buyouts to a “majority” of its 58,000 U.S. white-collar employees, as it aims to cut $2 billion in structural costs over the next two years, according to a letter sent to workers Thursday from CEO Mary Barra.
The “Voluntary Separation Program,” or VSP, will be offered to all U.S. salaried employees who have spent five or more years at the company as of June 30. Outside of the U.S., the automaker will offer buyouts to executives with at least two years of time at the company.
General Motors is insisting that these are not “layoffs” because employees will get an opportunity to make a choice.
But we are also being told that workers will be “strongly encouraged to consider” the program.
In other words, nobody will be forced out the door, but a significant amount of arm-twisting will be taking place.
Meanwhile, I just learned that Johnson & Johnson has decided to lay off hundreds of workers…
Johnson & Johnson is letting go of nearly 350 employees in the surgical robotics space, according to layoff notices filed in California at the beginning of this month.
The WARN notices list layoffs involving 292 workers at Auris, 47 at Verb Surgical, and four at Ethicon Endo-Surgery. All of the jobs were based in Santa Clara County; the layoffs are effective April 30.
The “tsunami of layoffs” that we have been warned about is here.
It is really happening.
If you lose your job in the months ahead, you can blame the Federal Reserve.
After pushing interest rates all the way to the floor and flooding the system with unprecedented amounts of new money, the Federal Reserve has reversed course.
Now Fed officials are dramatically hiking interest rates and are rapidly reducing the size of their balance sheet.
As a result, money supply growth has actually turned sharply negative…
Money supply growth fell again in January, falling even further into negative territory after turning negative in November 2022 for the first time in twenty-eight years. January’s drop continues a steep downward trend from the unprecedented highs experienced during much of the past two years.
Our system is not designed to handle this sort of a rollercoaster ride.
So there will be more layoffs.
And the housing market will continue to crash.
And more major financial institutions will be in peril.
In fact, it is being reported that a very important bank in California could potentially be on the verge of collapse…
Is the bursting of the tech bubble finally spilling over to the financial system?
One day after the biggest crypto-focused bank, Silvergate Capital, announced plans to unwind and liquidate after a deposit run effectively killed its core business model, this morning its far larger peer — the parent company of the venerable Silicon Valley Bank, SVB Financial Group — saw its shares plunge the most in more than two decades after the company took “steps to bolster its financial position” that included not only a highly dilutive stock offering but also a panicked asset sale that sparked fears of a liquidity crisis at one of the biggest and original providers of funding to the Venture Capital industry.
The Santa Clara-based company’s shares sank by as much as 60% on Thursday, their biggest decline in the company’s history since going public in 1987.
This is a really big story.
It has even been suggested that this could possibly be another “Lehman Brothers moment” if the financial position of the institution cannot be stabilized.
This news was part of the reason why stock prices were way down once again on Thursday…
The S&P 500 slid 1.85% to end at 3,918.32, while the Dow Jones Industrial Average dove 543.54 points, or 1.66%, to settle at 32,254.86. The Nasdaq Composite shed 2.05% to finish at 11,338.35.
Thursday’s losses brought the Dow to close below its 200-day moving average for the first time since Nov. 9. For the week and year, the 30-stock index is down 3.4% and 2.7%, respectively.
I am going to be watching the financial markets very carefully in the weeks ahead.
Trouble is brewing.
Hopefully the recent slide that we have been witnessing will not become an avalanche.
But if the Federal Reserve continues to go down this road, it will inevitably cause a tremendous amount of chaos.
For a very long time, the Fed artificially propped up our financial system. Unfortunately, now the artificial support has been removed, and that is really bad news.
We all knew that a day of reckoning would arrive eventually, but hopefully we have at least a little bit more time before our financial system starts coming apart at the seams.
Second Round Of Mass Layoffs
We haven’t seen a tsunami of layoffs like this since the Great Recession. According to Challenger, Gray & Christmas, the number of job cuts announced in January and February was 427 percent higher than during the same period in 2022. Unfortunately, the mass layoffs have just continued to roll on here in March. If corporate executives believed that economic conditions would soon improve, they would not be doing this. Sadly, they can see what the rest of us can see. Economic conditions are rapidly deteriorating, and at this point even some of the wealthiest and most prosperous firms in the entire nation are giving the axe to vast numbers of workers.
For example, Amazon just announced that another 9,000 workers will be terminated during their second round of mass layoffs…
Amazon on Monday announced plans to cut another 9,000 positions, its second round of mass layoffs in recent months.
The company will be targeting roles in its cloud computing unit, human resources division, advertising and Twitch, according to a letter to employees from CEO Andy Jassy.
Amazon is the number one online retailer in the United States.
If Amazon executives expected 2023 to be a vibrant year for the company they would not be getting rid of valuable employees.
Meanwhile, Facebook has just announced another five-digit round of layoffs…
Facebook parent company Meta earlier this month announced plans to lay off another 10,000 workers after cutting 11,000 employees in 2022, and Google in January said it would be eliminating roughly 12,000 jobs.
At one time Facebook was swimming in more cash than it knew what to do with.
But now Facebook executives are ruthlessly shedding bodies.
Another tech company that has already decided to implement a second round of layoffs is Waymo…
Alphabet’s Waymo has issued its second round of layoffs this year, the company confirmed to TechCrunch. Combined with the initial cuts in January, the self-driving technology company has let go of 8%, or 209 employees, of its workforce.
The layoffs — mostly engineering roles — are part of a broader organizational restructure that follows a “fiscally disciplined approach,” according to a Waymo spokesperson. In other words, the company is cutting costs where it can as it continues to develop and deploy its technology.
Sadly, this sort of thing is happening all over the tech industry right now.
Cross-border payments platform Chipper Cash is deeply slashing payroll less than three months after they conducted an initial round of very painful layoffs…
African cross-border payments platform Chipper Cash conducted a second round of layoffs last Friday just 10 weeks after it cut approximately 12.5% of its workforce(affecting its engineering team the most).
The company’s VP of revenue shared the news on LinkedIn, saying “all areas” across Chipper Cash’s markets were impacted this time. “Friday was a sad day for Chipper Cash, as many talented people were let go,” his post read. “For my network: there is an incredibly talented pool of individuals across the U.S., U.K., South Africa, Nigeria, Kenya, and more. They are all highly experienced in managing very complex, multicultural teams and projects in fintech. All areas have been impacted, from Recruiting, HR, Marketing, Pricing, Product, Analytics, UX, Research, Legal, and more.”
Overall, 503 tech companies have laid off a total of 148,165 employees so far in 2023.
But I don’t want to give you the impression that this is only happening in the tech industry.
For example, a major player in the pharmaceutical industry is also on their second round of layoffs…
Amgen Inc said on Thursday it would cut 450 jobs, or less than 2% of its workforce, making it the company’s second round of layoffs this year amid intensifying pressure on drug prices and high inflation.
“We made these changes to realign our expense base in the face of intensifying pressure on drug prices and high levels of inflation,” a company spokeswoman said in a statement to Reuters.
Close to two-thirds of all Americans are currently living paycheck to paycheck, and so many of those that are losing jobs will quickly be unable to pay their bills if they are not able to secure new employment.
Just like during the Great Recession, we will likely see vast numbers of people lose their homes in the months and years ahead.
And that means that the ranks of the poor and homeless will soon be getting even larger.
That is really bad news, because our rapidly growing homelessness crisis is already making headlines all over the globe…
Shabby tent encampments erected in city parks, along streets and beneath overpasses. Homeless people, many with mental health or drug problems, sprawled across sidewalks or subway seats. Needles and other paraphernalia often nearby.
America’s homelessness scourge is huge and shows few signs of getting better.
California is by far the worst hit. It has about a third of all the country’s homeless people, and Los Angeles, San Jose, Oakland, and other Golden State cities have among the largest numbers of unsheltered people in the country.
Things are particularly bad in Los Angeles.
It is being reported that more than 65,000 people currently sleep on the streets of L.A., and many of them are drug addicts that leave used needles and human excrement everywhere that they go…
Los Angeles city council member Joe Buscaino has complained that kids in his city have to ‘step over needles’ and ‘human waste’ on their way to school due because of those crashing out in residential areas.
‘No child in America should be afraid to walk to school, and what we have found in Los Angeles is kids are afraid to walk to school,’ the Democrat said in a television interview late last year.
‘They tell their parents they have to step over needles, human waste, and deal with individuals unfortunately suffering from psychotic behavior — right next to their playground area.’
This is our country now.
And conditions are only going to get even worse as time goes on.
If you currently have a job that you value, I would encourage you to cling to it with all your might.
And I would also encourage you to get prepared for the extremely rough economic conditions that are coming, because the years that are ahead of us will look completely different from the years that we have just been through.
Decades of very foolish decisions have brought us to this point, and now our society is going to reap exactly what it has sown.
About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to my new book I have written six other books that are available on Amazon.comincluding “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”.
Read the full bio here.
These articles were originally published in The Economic Collapse blog on Mar 09, 2023, and The Most Important News blog on on Mar 20, 2023, with the titles “So Far In 2023, Announced Job Cuts Are Running 427 Percent Higher Than They Were At This Time In 2022” and “Many Companies Are Already On Their Second Round Of Mass Layoffs” respectively. The views expressed are the author’s, and do not constitute an endorsement by or necessarily represent the views of On Aviation™ or its affiliates.