U.S. job market divide boosts prospects for some workers, puts others in focus

A sign for help is displayed in the window of a business in Brooklyn, New York.

Spencer Platt | Getty Images

cracks are forming US labor market Because some companies want to limit hiring, while others desperately need staff.

Microsoft, Twitter, Wayfair, break off and facebook parents Yuan Recently announced that they plan to be more conservative in adding new employees. Peloton and Netflix Announce layoffs As demand for its products slows, and online car sellers Kavanagh cut Its workforce faces inflation and plummeting stock prices.

“We view recruiting as a privilege and carefully consider when and where we increase our headcount,” Uber owner Dara Khosrowshahi write to staff Earlier this month, it pledged to cut costs.

U.S. employers cut more than 24,000 jobs in April, up 14% from the previous month and 6% from a year earlier, according to jobs firm Challenger, Gray & Christmas.

But airlines, restaurants, etc. still need to fill a position. There were 52% fewer layoffs in the first four months of the year compared to the same period in 2021. Nearly 80,000 layoffs were announced between January and April, the lowest number in nearly 30 years the company has tracked data.

What’s emerging is a story about two job markets — albeit not of the same size or pay. Hotels and other services cannot hire enough workers to staff what is expected to be a bustling summer rebound after two years of Covid hurdles. Tech companies and other large employers are warning they need to cut costs and alerting employees.

Record job openings

us Vacancies The seasonally adjusted number soared to 11.55 million at the end of March, a data record going back to 2000, according to the latest Labor Department report. The number of departing employees also hit an all-time high of more than 4.5 million. Employment is 6.7 million.

salary is rise but not enough to keep up inflation. and people are Change Where they spend their money, especially as household budgets are tightened by the highest consumer price hikes in four years.

Economists, employers, job seekers, investors and consumers are looking for signals about the direction of the economy and for emerging divisions in the labor market. That disparity could mean slower wage growth or slower hiring itself, and could ultimately cut back on consumer spending, which remains strong despite deteriorating confidence.

From airlines to restaurants big and small, companies are still not hiring fast enough, forcing them to Cut back on growth plans. After these companies, demand is picking up faster than expected shed workers During the pandemic-induced slump in sales.

JetBlue Airways, Delta Air Lines, Southwest Airlines and Alaska Airlines Have Shrink your hands Growth plans, at least in part, are due to staffing shortages. JetBlue said pilot attrition was higher than normal and likely to continue.

“If you’re churning 2 to 3 times what you’ve seen historically, you need to hire more pilots,” JetBlue CEO Robin Hayes said at a May 17 investor conference. Keep still.”

Denver International Airport’s franchises, such as restaurants and stores, have made progress in hiring but are still understaffed, with about 500 to 600 workers to reach about 5,000 people.

She said many chefs are making about $22 an hour, up from $15 before the pandemic. Airport employers are offering recruitment, retention and, in at least one case, what she calls “a bonus if you come to work every day of the week”.

Bank of America economist and director David Tinsley said consumers “have spent a lot on goods during the pandemic and not so much on services, and now we’re seeing in our card data By the time they’re flying back into service, they’re literally flying around.” Institute.

“This is for those who might think [had] It’s overkill in terms of hiring,” he said of current trends.

rebound

The companies leading the job gains were the hardest hit early in the pandemic.

Jessica Jordan, managing partner of Rothman Food Group, is working to get the workers she needs for her two Southern California businesses, Katella Deli & Bakery and Manhattan Beach Creamery. She estimates both are only about 75 percent staffed.

But she said half of job applicants never responded to her interview emails, and even new hires who had submitted paperwork often disappeared before day one without explanation, she said.

“I worked really hard to hold their hands every step of the way, just to make sure they came in on day one,” Jordan said.

Larger restaurant chains also have high hiring orders. Sandwich chain Subway, for example, said Thursday that it plans to add more than 50,000 new employees this summer. Taco Bell and Inspire Brands, which own Arby’s, said they are also looking to add staff.

According to the U.S. Bureau of Labor Statistics, the hotel and food service industry had the highest turnover rate in March, with 6.1% of workers leaving. The overall quit rate for that month was just 3 percent.

Some of these workers are leaving the hospitality industry entirely. Julia, a 19-year-old girl living in New York City, quit her restaurant job in February. She said she left because of hostility from clients and her boss, as well as adding too many extra shifts at the last minute. She is now working in a nursery.

“You have to work really hard to get fired in this economy,” said David Kelly, chief global strategist at JPMorgan Asset Management. “You have to be very incompetent and obnoxious.”

Silicon Valley economic slowdown

And vice versa if the rebounding industry is hiring catching up.

Following the hiring spree, several big tech companies announced hiring freezes and layoffs as concerns over a slowing economy, the Covid-19 pandemic and the war in Ukraine dampened growth plans.

Well-funded startups aren’t immune, even if they don’t suffer the same drop in market value as public tech stocks.According to statistics, at least 107 tech companies have laid off staff since the beginning of this year layoffs.fyiwhich tracks layoffs across the industry.

In some cases, companies such as Facebook and Twitter is taking it down New hires have embraced job offers, putting workers like Evan Watson in a precarious position.

Last month, Watson received a job offer to join Facebook’s emerging talent and diversity division, one of what he called “dream companies.” He issued the notice at the real estate development company where he works and set the social media giant’s start date as May 9.

Just three days ago, Watson got a call about his new contract. Facebook recently announced That would put a pause on hiring, and Watson anxiously guessed he might get bad news.

“My heart dropped when I got the call,” Watson said in an interview. Meta is freezing hiring while Watson’s Onboarding is closed.

“I was like silence. I really had nothing to say,” Watson said. “Then I thought, ‘Now what? I don’t work for another company.'”

The news disappointed Watson, but he said Facebook was willing to pay severance as he looked for a new job. Within a week, he landed a job as a talent scout at Microsoft. Watson said he “feels good” about landing Microsoft, which is “much more stable in terms of share price.”

For several months, the retail giant Amazon dangling Generous signing bonus and Free college tuition lure workers. The company has employed 600,000 people since the beginning of 2021, but it is now finding it overstaffed in its fulfillment network.

Many of the company’s recent employees are no longer needed, E-commerce sales growth coolsIn addition, Amazon CFO Brian Olsavsky said on a conference call with analysts last month that employees who had called in sick amid a surge in COVID-19 cases were returning to work earlier than expected.

“Demand is now more predictable, and some sites in our network are slowing or suspending hiring to better meet our operational needs,” Amazon spokeswoman Kelly Nantel told CNBC.

Amazon did not answer questions about whether the company expects layoffs in the near future.

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