Citigroup CFO Mark Mason (C) announced on Friday that the company will lay off 20,000 employees over the next two years. The company is joined by several others including Amazon (AMZN) and Google (GOOG, GOOGL) who have also announced upcoming layoffs. But are these job cuts a sign of things to come or is the job market more secure than these announcements lead on?
LinkedIn Senior Economist Kory Kantenga joins Yahoo Finance to give insight into the job market and whether or not the layoff announcements are something consumers should worry about.
“Overall, when we look at the data both at LinkedIn and the Bureau of Labor Statistics, the labor market seems pretty steady and stable. We’re seeing that hiring is actually up in December, and we’ve seen the lowest decrease compared to last year in December in LinkedIn data than we’ve seen in over 12 months,” Kantenga says.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Nicholas Jacobino
Video Transcript
JOSH LIPTON: Meanwhile, Citigroup announced it would cut 20,000 jobs as part of a dramatic restructuring to try to turn around the company and bolster the bank’s stock. It’s the latest in a string of corporations making cuts this week, from nearly 1,000 jobs at Google, hundreds of Amazon, and today, Universal Music. It’s giving us flashbacks to 2023 and the year of efficiency, coined, of course, by Meta’s Mark Zuckerberg.
But what does this trend say about the health of the economy? Let’s ask LinkedIn’s senior economist, Kory Kantenga. Kory, it’s good to see you. So these headlines keep coming, Kory. So Citi and Google and Amazon– I don’t know– should we get nervous here, Kory?
KORY KANTENGA: Well, there’s two things we need to keep in mind when we see these headlines about layoffs. One, like a lot of things in the US economy, layoffs are seasonal. They primarily happen in January. And the information sector, according to the Bureau of Labor Statistics data– and the information sector is very tech-heavy. That’s also something to remember. So this tech-heavy information sector, the layoff rate’s about 50% higher in January than any month during the year. So layoffs are seasonal. It’s not surprising to see a lot of layoff announcements in January.
The second thing to keep in mind is that overall, when we look at the data, both at LinkedIn and at the Bureau of Labor Statistics, the labor market seems pretty steady and stable. We’re seeing that hiring is actually up in December. And we’ve seen the lowest decrease compared to last year in December and LinkedIn data than we’ve seen in over 12 months.
JARED BLIKRE: We’ve also seen a lot of action, reshuffling in the media industry. Broadly, we’ve seen mergers and acquisitions, and of course, layoffs are part of that. What have we seen inside media?
KORY KANTENGA: So in media, actually, from December, we’re seeing media is actually one of the weaker sectors that we’ve seen. But in general, media tends to not be too extreme in terms of being down, way down year over year compared to tech, to places like tech professional services. So media is down in December, but there aren’t really any signs that media is doing particularly poorly compared to other sectors.
JOSH LIPTON: Kory, can I go back to tech for a second? I want to bounce one kind of argument I’ve heard about that. And the argument goes like this. It’s that these big tech names, they’ve been putting a lot of time and money and effort into AI, Kory. Meanwhile, of course, they don’t really expect to generate meaningful revenue off AI for some time. So to preserve margins, so the argument goes, they’re laying off folks. What do you make of that? Is that reasonable to you?
KORY KANTENGA: So in tech, we’re actually seeing the labor market stabilize. Hiring in tech is actually up about 12%, compared to July. So we did see a big correction in tech in the last year and a half. They went on a hiring spree during the great reshuffle. So they’ve definitely adjusted. They’ve tried to adjust their hiring needs, adjust the size of their labor force, but we’re starting to see tech is still hiring.
And we hear a lot of headlines about really big companies, but what we’ve seen at LinkedIn is that it’s really been a lot of small companies in tech that have kept that sector going. Small companies have been out hiring a bit more than larger companies as of late. So tech is still going in terms of hiring. We have seen places adjust their hiring needs, but tech is continuing to start to hire again. And as I said, tech is up about 12% in terms of their pace of hiring in December compared to July.
