Monique Valcour, an executive coach, emphasized the importance of quality in workplace interactions during a period of uncertainty. It can be really tempting for anxious employees to spend time trying to read the tea leaves of what management is thinking and where the ax may fall. But “sharing low-quality information and organizational gossip is unproductive,” she said.
Instead, Valcour recommended employees work to build solid relationships with management, avoid spreading themselves too thin, make the commitments they already have count and embrace some of the change that may be coming their way.
“Uncertainty,” she said. “Is part of what it means to have a career.”
It’s a storm not a tsunami
The cuts are unsettling, but many economists said workers shouldn’t worry too much, as long as recent economic trends persist.
“We’re getting a lot of stories about a specific chunk” of the labor market, said Heidi Shierholz, president of the Economic Policy Institute in Washington, DC. By and large, blue-collar jobs have been in good shape — it’s the white-collar, professional services jobs in areas such as finance and technology that have been struggling. “But that level of layoffs is actually a normal part of our labor market,” she said.
Shierholz also explained that layoffs and unemployment insurance claims have been lower than they were before the pandemic.
Some of this is seasonal
Penn, who advises firms on workforce planning, redesign and restriction, said the level of layoffs so far isn’t meaningfully different from prior years. Much of this comes down to how companies plan over the course of the year.
“December and January are the periods in which layoffs typically happen,” Penn said. “They’re going to clean up and fix anything budgetary from the prior year, or they’re looking to sort out and position themselves for the year ahead.”
Many firms — particularly in tech — overhired during the pandemic. Some are still correcting for that. It’s in this context that Lauren Goodwin, chief market strategist at New York Life Investments, said the layoffs she’s seen have been “more about normalizing” rather than a “profit-driven set of layoffs.”
Some of this is cyclical
Still, some layoffs appear connected to the current business climate in which interest rates are high but widely expected to fall at some point later this year.
“Firms are also repositioning and reorienting and reorganizing for growth,” Keum said. “Broadly every division and company is looking to grow, but growth has become a lot more expensive because interest rates are high, and there’s uncertainty about when they will come down.”
That uncertainty, combined with a desire to grow, has led to one of the more befuddling trends of the current labor market: layoffs at the same time as opportunistic hiring in certain segments such as AI.
This article was provided by Bloomberg News.