US corporations announce wave of job cuts, sparking concerns of economic shift

In recent months, major corporations including Starbucks, Target, Amazon, and Paramount have announced significant layoffs, raising concerns about broader economic trends. In September, Starbucks cut 900 corporate jobs, following a similar round of layoffs earlier in the year as part of efforts to streamline operations.

Target followed in October with 1,800 roles eliminated, while Amazon, Paramount, and Molson Coors also cited various factors such as AI, mergers, and changing consumer habits for their respective cuts, Bloomberg reports. 

While individual layoffs might seem like isolated decisions, economists are beginning to view the trend as a potential warning sign.

“You’ve got a substantial number of well-established companies making pretty big head cuts,” says Dan North, senior economist at Allianz Trade Americas. “You might start to wonder if these aren’t random.”

Data from outplacement firm Challenger, Gray & Christmas reveals that nearly 950,000 jobs were cut in the U.S. through September, marking the highest year-to-date total since 2020. This figure, which excludes 2020’s pandemic-related layoffs, already surpasses full-year job cuts for every year since 2009. North notes, "that’s not a very encouraging number."

Government sector job cuts have been the most severe, accounting for nearly 300,000 of the total. However, tech and retail industries have also been affected, with Southwest Airlines announcing its first large-scale layoffs in history.

For now, many companies are relying more on temporarycorporat workers, with demand for short-term labor rising in recent months.

"Some of that could be related to holiday hiring, but companies are also turning to temps to fill in for the long-term permanent workers they’ve been simultaneously letting go,” says Noah Yosif, chief economist at the American Staffing Association.

For workers like John Stigler, a 65-year-old laid off from his AV installation job in October, the news has been a blow. Despite expecting the slowdown, he was still caught off guard when his manager informed him,

“‘We have no work.’” Though Stigler plans to retire soon, he acknowledges that many younger workers face uncertain futures. “I am much luckier than a lot of my brothers and fellow workers in their 30s and 40s, wondering where their next job is coming from.”

By Sabina Mammadli