The job cuts at
Meta
Platforms are huge, but not exceptional. Many other companies are even more aggressive.
Meta (Ticker: META), Facebook’s parent company, said last week that it would cut 10,000 jobs and 5,000 vacancies. The cuts come less than six months after the company announced 11,000 layoffs in November as CEO Mark Zuckerberg seeks to run the business more efficiently.
This is not the worst: Barrons glanced at the staffing
S&P500
Businesses have changed in 2022. Many companies have made cuts deeper than the 21,000 jobs eliminated on Facebook.
Other companies have announced layoffs this year. And there are fewer jobs available.
2022 healthcare providers
Person
(HUM), for example, shed almost a third of its workforce over the past year, from 96,900 at the end of 2021 to 67,100. insurance company
American international group
(AIG) laid off approximately 10,000 employees out of 36,600, a 28% cut
MC Donald
‘s (MCD) reduced its workforce by 25% from 200,000 to 150,000.
Meta’s headcount grew 20% last year, though most of the 11,000 job cuts announced in November weren’t included in the year-end figure. The 11,000 cuts plus 10,000 layoffs announced last week would account for 24% of the approximately 86,000 employees working for the company at the end of 2022
Other companies that have shed a significant portion of their workforce over the past year include
Stanley Black & Decker
(SWK),
MGM Resorts International
(MGM) and
AT&T
(T).
It’s important to note that layoffs aren’t the only reason for headcount changes. Spin-offs or sales of parts of the company could also lead to significant staff reductions.
When it comes to absolute numbers,
Amazon.com
(AMZN) made the biggest dent. The e-commerce giant cut 67,000 employees from its payroll in 2022, the most among S&P 500 companies. However, since the company employed more than 1.6 million people at the end of 2021, the cut was just 4% of its total workforce.
FedEx (FDX), the recruitment consultancy
Robert Half International
(RHI),
Ford engine
(F), target (TGT) and
Wells Fargo
(WFC) have also cut many jobs, but the cuts have been relatively small compared to their overall workforce.
January jobs data suggest the trend has not abated. Job losses rose 240,000 from the previous month to 1.7 million, the highest level since 2020, according to the Bureau of Labor Statistics, despite a net increase in nonfarm payrolls of 517,000 jobs.
The biggest spike in job losses came from the professional and business services sectors, which include many technology companies. In recent years, the sector’s layoffs have generally remained at or below 400,000 a month, but in January the total reached 528,000, only the level seen at the peak of the pandemic.
At the same time, job vacancies have fallen since their peak last spring, while new hires have remained relatively flat. That means vacancies are disappearing because companies are cutting their hiring plans, not because positions have been filled.
In January, the number of job offers fell by 410,000 to around 10.8 million. The largest decline was not in professional services but in construction and accommodation sectors, followed by finance and insurance.
Job postings on the hiring site Indeed have been in decline since early 2022, but the decline has intensified in recent months. The number was last updated a week ago.
According to the Computing Technology Industry Association, US tech job postings fell 40,000, or 15%, in February from the previous month. That means the government jobs data for February could show more weakness when it becomes available.
In the current environment, a leaner workforce might be smart for some companies.
Take Meta, whose workforce is more than 10 times what it was a decade ago. According to the firm’s annual records, the workforce grew from around 6,300 people in 2013 to more than 86,000 in 2022.
The expansion was initially offset by strong growth. In 2016, Facebook had nearly $28 billion in revenue with about 17,000 employees, which translates to about $1.6 million for each employee.
By 2022, sales had grown to $116 billion, but as the workforce was larger, the figure per worker was $638,000, less than half the 2016 figure.
“For most of our history, we have experienced rapid year-on-year revenue growth and had the resources to invest in many new products,” Zuckerberg wrote in a letter Tuesday announcing the layoffs to his employees. call. The global economy has changed, competitive pressures have increased and our growth has slowed significantly.”
Write to Evie Liu at evie.liu@barrons.com
Source : www.barrons.com