Is Your Job At Risk?
251: Hedging Against Layoffs & Economic Uncertainty
January job cuts announced by U.S.-based employers have more than doubled since December according to Challenger Gray a Chicago-based global outplacement & career transitioning firm. U.S.-based employers announced plans to cut 82,307 jobs in January 2024, more than double December's 34,817, and the highest in 10 months (@wallstengine)
If you’ve been paying attention you’ll have noticed this week that layoffs at companies are ramping up despite the regime propaganda insinuating that the economy is completely fine and all Americans are flourishing.
It would appear we are in a strange time where some firms and companies in corporate America have not fully bucked the hybrid and remote roles from their ranks, while others have struck hard with 5 days in the office mandates. It’s becoming more apparent that many companies took on more than they could chew in the last several years and have no begun to look for ways to cut costs — layoffs are one of the easiest ways to do that.
They’re also cracking down on the slick employees who have been leveraging remote work to the max — traveling, playing WarZone, working on side grinds, and generally hitting cruise control while the world becomes crazier and crazier.
In the past several weeks layoffs have jumped rapidly — it seems a new company announces each day now in all different industries from shipping to finance to tech to pharma and more. It would seem no one is safe at this point.
UPS is cutting over 12,000 jobs — remember when the internet was up in arms about salaries of $170K for some drivers?
Deutsche Bank, $DB, is cutting 3,500 jobs in an effort to reduce costs.
Nasdaq is cutting 1,000 employees
Paypal is cutting 9% of it’s workforce
Microsoft announced it is cutting 1,900 roles
American Airlines is cutting 650 jobs
H&M announced intentions to layoff 588 employees and close 28 stores
Zerox cut 15% of it’s workforce
Twitch announced it is cutting 35% of workforce
AstraZeneca announced 256 layoffs yesterday within IT roles, 7% of Global IT as they rebalance to other countries (Macroedge)
Various journalists numbering over 3,500 have lost jobs in the past 3 months
This is a short list of examples — many more companies are cutting employees in the face of economic uncertainty and cost considerations.
The big question for most investors, traders, and businessmen at the moment is will the Fed achieve a soft landing — in other-wards can the Fed avoid a recession. Since the Covid magic money printer days of up only markets even the most astute and well read economists have had trouble pinning down how this all going to play out.
The reality is — this is likely just the start of mass waves of layoffs as companies try to tighten up their bloated pandemic structures that flourished in the free money era of low interest rates. This trend can’t be blamed on any one condition — like AI or automation or even high interest rates. The economic environment is largely the result of forward looking views of management teams at companies that aggressively over-hired over the last two years.
According to Zety's Leaving a Job: Termination to Resignation 2023 Report, a whopping 6 in 10 (58%) of workers confessed that they were afraid of getting fired. Another poll by Resume Builder has 38% of companies reporting that they may have layoffs in 2024.
That number is likely higher this year amid non stop layoffs in all industries and more uncertainty on the economy.
Getting fired or laid off can have a range of negative impacts on your life:
You can fall behind financially
You can suffer reputational damage under certain instances
You can suffer a career or job path setback
Emotionally, being laid off can put you in a poor mental state
You can lose important benefits like healthcare
Luckily — here at Arb Letter I am a huge proponent of hedging these outcomes with proactive measures that should start before you even take on a new role. We’ll cover those measures and provide an overall strategy for mitigating the downside risk that comes from an environment where layoffs are escalating and finding a replacement gig might be more difficult than times where hiring sprees are ramped up.
Today we’ll talk through a few things based on my experiences and the collective anecdotal examples of many of my followers and contacts:
How to sense or identify that layoffs are coming
How to insulate yourself from waves of layoffs
How to hedge against the worst
Strategies to leverage so that you don’t sweat job security and uncertainty
With that let’s get into it. In this uncertain economic and macro environment the more information you can get your hands on to identify layoff risk early, the better off you will be.
I’m afraid nobody will be exempt from the chance of falling victim to layoffs this year or at the very least being impacted by restructuring or large changes — this post will help everyone, including those fortunate enough to retain employment or those who are hanging on by a thread. This Friday the first jobs report of 2024 will drop and provide potential clarity into the disparity between what the government is telling us and what is being announced each day.
“I’m now much less of an asset to the company than I could be. I keep my head down and for self-preservation just do my work with little conversation with anyone. Yet the irony is this: in my self-preservation, I’m actually destroying myself. In bottling up my unexpressed feelings, I’m making myself sick emotionally and physically.”
― Gary Chapman