Meltdown: Layoffs Surge 193% in Just One Month—Is the Economy Crashing?

Remember when everyone was freaking out about hiring shortages and companies were practically throwing money at anyone who could fog a mirror? Yeah, those days are over and it’s hitting close to home. 

(Source: Giphy) 

For instance, not to get sappy on you all, but my kid brother (one hell of a salesman, and nice ole chap) hasn’t been able to find a job in over a year as the job market has slammed into an iceberg while the only lifeboats seem to be for the C-suite execs.

And I’m not just saying that, (side note: you may want to sit down for this one), in August alone, layoffs skyrocketed to a jaw-dropping 76,084 according to the fine folks at Challenger, Gray & Christmas. That’s a 193% jump from July. Yes, you read that right—193%.

(Source: Challenger, Gray, and Christmas) 

 To put that in perspective, the last time August saw this level of carnage, it was 2009 and the world was still recovering from collectively setting our money on fire during the Great Recession.

Andrew Challenger (no relation to the space shuttle disaster, but the vibes are eerily similar), the SVP over at Challenger, Gray & Christmas, is pointing the finger at “growing economic uncertainty.” Translation: Companies are freaking out, slashing jobs left and right, and hoping they can survive the storm that’s brewing on the horizon.

(Source: JDN) 

Especially when it comes to the tech industry (see: Intel, Apple, and Paypal for example) as they’ve all decided it’s time to stop playing fast and loose with VC funding. This sector alone has shed around 41,829 jobs in the last two months, resulting in the highest number of tech layoffs since November 2020 - back when the world was still figuring out how “social distancing” worked and Zoom was the only thing keeping the economy afloat. 

Not surprisingly, the main reason is the fact that companies are realizing that maybe, just maybe, profitability matters. So naturally, they’ve hit the brakes, dumped the growth-at-all-costs mentality, and started doing what we all do when the credit card bill comes due: panic and cut back.

What’s more is that hiring announcements have barely hit 80,000 YTD - aka the lowest since 2005. For context, Myspace was experiencing more action than that back then. Oh and private sector additions in August? Yeah just a measly 99,000 jobs. Which is basically nothing. 

(Source: Yahoo Finance) 

Meanwhile, job openings are doing their best Houdini impression. In July, the Labor Department reported 7.7 million available positions, down from 7.9 million the previous month. This might not seem like a big deal until you remember that just last March, we were sitting pretty with 11.9 million openings. So to me, it’s almost like employers are realizing they actually have to pay people to work or something. Who knew? 

(Source: Yahoo Finance) 

Again, this is definitely an interesting example of what a daggum year can do to an economy. Especially since last year, companies couldn’t throw money at workers fast enough. We were all enjoying wage boosts, bonuses, and perks like we were in some sort of capitalist fever dream. Now? That dream’s turned into a nightmare.

(Source: Giphy) 

So with that said, what’s the outlook look like for the economy? Well, naturally, economists are squinting at their crystal balls, trying to figure out if this is just a speed bump on the road to recovery or the start of a full-blown recession. Meanwhile, Grandpa Powell & Co. are hovering over the “raise interest rates” button like a Wall Street Bets trader with FOMO, desperate to cool off inflation but terrified of accidentally nuking the economy.

(Source: 9GAG) 

But the thing that most people who don’t read Stocks.News understand (meaning, you folks reading this are pretty dang cool, I must say), is that rising layoffs could actually help with inflation. You see, less money in people's pockets means less spending, which could theoretically lower prices. However, if job cuts go nuclear, we could find ourselves in a recession faster than you can say “money printer go burrrrr”. 

(Source: Giphy) 

So all this to say, it’s clear that most companies are experiencing full-on survival mode vibes. And the result is fewer jobs, more layoffs, and a whole lot of uncertainty for anyone who wasn’t lucky enough to snag a golden parachute (like my brother, bless his heart). 

The moral of the story here? Don’t get too comfortable. The market could either be on the cuffs of a cold, cold winter… or an exploding quantitative easing “fun coupon” craze. The direction remains to be seen…

(Source: Giphy) 

But regardless, why worry about what the overall market is set to do when the last FIVE of our Stocks.News alerts all exploded to peak moves of +110%, +185%, +110.10%, 162% and +300%... in LESS than 48 hours?! Incredible right? Our premium members have absolutely been eating the past few weeks, and with the anxiety of rate cuts looming in September, our next alert is set to be even more explosive. 

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In the meantime… stay safe and stay frosty, friends! Until next time…

Stocks.News holds positions in Apple and Intel as mentioned in the article.