2024 Wrap January’s Labor Market Summary

As we conclude the first month of 2024, the U.S. labor market has undergone noteworthy developments, reflecting a mix of challenges and transformations. Let’s delve into the details, exploring the multifaceted dynamics that have shaped the employment landscape in January.

1. Jobless Claims Surge to Two-Month High

January kicked off with an unexpected surge in U.S. jobless claims, reaching a two-month high. Initial applications soared to 224,000 in the week ending Jan. 27, surpassing the median forecast of 212,000 from a Bloomberg survey of economists. Notably, California, New York, and Oregon experienced the most substantial gains. Unadjusted data, disregarding seasonal influences, revealed a spike of 11,000 to about 261,000.

Continuing claims, a metric indicating the number of individuals receiving unemployment benefits, rose to 1.9 million in the week ending Jan. 20. This uptick in claims signals a potential cooling of the labor market, as fewer individuals are quitting their jobs compared to the peak of the pandemic recovery. The recent high-profile job-cut announcements, including those from United States Parcel Service Inc., suggest a cautious outlook, hinting at the possibility of rising unemployment in the coming months.

2. Workforce Concerns at the Start of the Year

The year commenced with heightened apprehensions among workers, as 85% expressed fears of potential layoffs in 2024. These concerns materialized in January, with job cuts accelerating at the highest pace since March 2023. Notably, the tech and media sectors bore the brunt of these layoffs, driven by a combination of investor pressure and a shift towards artificial intelligence.

The workforce landscape witnessed US-based employers announcing plans to cut over 82,300 jobs last month, more than doubling the December figure. Despite this surge, the numbers remained below the 103,000 reported a year earlier, as outlined in a report from Challenger, Gray & Christmas. Simultaneously, hiring plans recorded their weakest performance for a January, indicating a potential slowdown in recruitment activities.

3. High-Profile Layoffs Making Headlines

The turbulence in the job market was accentuated by a series of high-profile layoffs across diverse industries:

1. Zoom: Cut roughly 150 jobs.
2. Audacy: Laying off 12 employees, which accounts for 25% of its staff.
3. Okta: Letting go of 7% of its workforce, approximately 400 jobs.
4. Deutsche Bank: Laying off 3,500 employees, mostly in back-office roles, in the coming years.
5. The Messenger: Shut down abruptly in late January; approximately 300 staffers were not offered severance or healthcare.
6. Nasdaq: Planning to cut hundreds of jobs as it begins integrating software firm Adenza into its business.
7. TechCrunch: Shut down its paid subscription product TC+ and laid off eight staff members.
8. Block: Began laying off workers after announcing the cuts last year; layoffs could affect up to 10% of its 13,000 employees.
9. PayPal: Cutting about 9% of its workforce this year, affecting roughly 2,500 people.
10. The Wall Street Journal: Restructuring its Washington bureau and laying off an unspecified number of staff.
11. American Airlines: Laying off 656 customer service and baggage resolution employees.
12. UPS: Laying off 12,000 employees in response to weak demand and higher union labor costs.
13. Flexport: Cutting 20% of its workforce this year, about 500 employees.
14. Flexe: Laid off 99 people this month, or 38% of its staff.
15. Uber Freight: Let go of about 1% of its workforce.
16. iRobot: Laying off 350 people, or around 31% of its staff.
17. Microsoft: Laid off 1,900 Activision Blizzard, Xbox, and ZeniMax employees, about 8% of its gaming division staff.
18. Jamf: Laying off 6% of its full-time employees.
19. REI: Laying off 357 workers.
20. Salesforce: Laying off 700 people.
21. Levi Strauss: Cutting up to 15% of its corporate workforce.
22. Paramount: Reducing its workforce by an unspecified amount.
23. Business Insider: Cutting 8% of its workforce.
24. TIME magazine: Laid off 15% of its editorial staff.
25. SAP: Laying off 8,000 jobs as part of a restructuring.
26. eBay: Laying off 1,000 workers, or 9% of its full-time employees.
27. Vroom: Laying off 800 workers, or 90% of its workforce.
28. Los Angeles Times: Reducing its newsroom by 20%, or about 100 positions.
29. Figma: Offering buyouts to employees.
30. Brex: Laying off 20% of its workforce, about 282 jobs.
31. TikTok: Cut about 60 jobs primarily in advertising and sales.
32. Riot Games: Laid off 11% of its global staff, about 530 people.
33. X (Alphabet’s moonshot lab): Cutting dozens of jobs.
34. Sports Illustrated’s publisher, The Arena Group: Laid off the magazine’s entire staff.
35. Wayfair: Reducing its global workforce by 13%, cutting 1,650 jobs.
36. Macy’s: Closing five stores and eliminating 2,350 jobs.
37. Pitchfork: Some staffers were let go after publisher Condé Nast folded the music site into its GQ brand.
38. Bayer AG: Cutting some manager jobs over the next year as part of a new operating model.
39. Apple: Shutting down its artificial intelligence operations team, with all 121 employees asked to relocate within the company or risk termination.
40. Universal Music Group: Laying off hundreds of jobs this year, primarily in its recorded music division.
41. Citigroup: Eliminating 20,000 jobs to cut costs by $2.5 billion.

These layoffs, spanning from technology and finance to media, underscore the widespread impact of the evolving economic landscape on various sectors.

4. Economic Indicators and Upcoming Releases

Key economic indicators and upcoming releases provided additional insights into the state of the labor market:

• The Conference Board’s monthly Consumer Confidence Survey gauged Americans’ sentiments about the economy.
• The Bureau of Labor Statistics released the Job Openings and Labor Turnover survey for December, offering insights into job vacancies across industries.
• The Federal Reserve’s interest rate decision, scheduled for Wednesday, could influence market expectations.
• The Institute for Supply Management’s monthly Purchasing Managers’ Index tracked whether the manufacturing sector was expanding.
• The eagerly awaited January jobs report from the Bureau of Labor Statistics, set for release on Friday, promised crucial information on unemployment rates and job additions.

2024 has set the stage for a nuanced and evolving employment landscape, marked by unexpected jobless claim increases, workforce concerns, and high-profile layoffs. The upcoming months will undoubtedly bring more clarity to the trajectory of the labor market, influencing recruitment strategies and employment dynamics in the year ahead.