Companies slashing jobs

Investment Analysis Clubs Macro Economic Trends and Risks
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https://www.wsj.com/economy/jobs/u-s-companies-are-still-slashing-jobs-to-reverse-pandemic-hiring-boom-abf1b94e?mod=hp_lead_pos1

U.S. Companies Are Still Slashing Jobs to Reverse Pandemic Hiring Boom

Many corporations binged on labor during the pandemic. Now, facing economic uncertainty and threats from AI, they are slimming down.

by Konrad Putzier and
Chip Cutter, The Wall Street Journal, 1/29/2026

…
Amazon said Wednesday that it would lay off an additional 16,000 corporate employees after laying off 14,000 workers in the fall. The combined cuts amount to around 10% of Amazon’s corporate workforce. On Tuesday, UPS said it expected to slash 30,000 jobs this year, on top of 48,000 job cuts last year, saying the company needed to “right-size.” Also on Tuesday, social-media company Pinterest said it planned to shrink its workforce by up to 15%…

By many measures, the U.S. economy still boasts a relatively healthy job market. The layoffs are heavily concentrated among a small number of big companies, and overall job losses are low by historical standards. The unemployment rate, while up from 2024, is well below prepandemic levels. …
Hiring has nevertheless slowed to a crawl. People who lose their job today often have a hard time finding a new one, and they stay out of work for longer. In December, the average length of unemployment was 24.4 weeks, according to Labor Department data. In December 2022, the figure was 19.4 weeks…

“In this current market, people need to realize what they’ve done might not be what they’re going to be doing forward,” he said. “They’ve got to constantly be evolving.” [end quote]

I think “constantly evolving” is a euphemism for “these jobs are gone and they aren’t coming back.”

In classic recessions, a rise in unemployment causes lower demand which feeds into lower sales, higher inventories and more layoffs. But eventually the economy recovers and the jobs return.

In a world of AI and automation the jobs may not return.

It’s very hard for average workers to “constantly evolve.” It’s hard for average people to acquire new skills, especially skills that are beyond the capacity of machines and which also pay well.

For the past couple of weeks I worked with ChatGPT to generate a legal document as part of my estate planning. This took hours of iterations to get just right. DH and I went to a lawyer yesterday to read it, confirm that it’s OK, and notarize it after we signed it. That lawyer visit took 3/4 hour (including discussions) and cost me $300. I have no doubt that the lawyer would have charged thousands for generating the document de novo.

My sister told me yesterday that her son (who has a Master’s degree in math education but no training in computer programming) edited and corrected a gaming program created by a friend…with the help of AI.

AI will pull the rug out from under many professionals at the same time that automation pulls the rug out from under the physical work force. This is happening today, in real time.

Wendy

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I’ve come across the hiring binge during the pandemic idea several times. Given how hard it was to find workers then, how much of bing was there really?

From the spring of 2021:

Why It’s Hard to Hire Right Now
https://www.nytimes.com/2021/05/22/business/dealbook/labor-shortage-causes.html
Businesses of all types report that they are having trouble hiring despite high unemployment. But are expanded unemployment benefits really to blame?

DB2

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This is not happening because of AI. We are not seeing any increase in manufacturing which would require a big demand for engineers and construction workers promised by POTUS. POTUS is pushing our worldwide trading partners away and behaving like a tyrant toward them. So why would our economy grow and why would immigrants come to a place that mistreats them and deports them. Even Europeans no longer trust America to be a reliable place to live and work.

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AI in this case may stand for Also, India.

Indian resources are less than 30% of the US equivalent. Although they must be managed more, the savings is stark. For comparison, eastern Europe is at 65% and rising (Hungary, Poland, Romania, Ussssed to be Ukraine, etc)

I just lost another Indian resource today. That person was very helpful and significantly contributed to our developments. I’ll find another equally qualified person to backfill.

Virtual/Digital workers and corporate jobs are easy to cut. Watch for blue collar layoffs, this matter MUCH more than “management cuts”.

My company has more than 10,000 employees in North America, we are retaining blue collar workers to prevent skill/capacity gaps when work returns.

Bob points to the post pandemic hiring “binge”. I experienced this directly at my prior company and 2nd hand through my current organization. This was mostly due to whipsaw demand and channel filling, channel shifts during that time. Waits for Boats were out to 3 years for high demand units. (this was also true of special edition cars, trucks)

At that time, there simply was not enough production capacity due to poorly skilled workers being forced to work in processes without onboarding and immaturity in management above to properly handle sales and operations planning.

Now, the pendulum is the other way. Relatively low utilization in the factory capacities, good process control and improving systems, but too many hands on deck and “strategic holds” for blue collar.

We’re in a white collar hold… but I can hire any blue collar person if I have a gap that needs to be filled.

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Someone from the UAE of Indian descent helped me with my software stack. I’d be nowhere without him. He also told me about a major aspect of my “toy” vs. “real life”. Video games are toys. Real life need not apply. He is a Ph.D. aeronautical engineer who had his own company. He left this summer for California and bigger digs. He writes his own ticket. He works in CPP, which used to truly impress me, but CPP got cleaned up a long time ago. I did not know. He has worked on AI for over a decade.

I like my coffee group. I’d see him there in the mornings. Since he moved, a lot of my inspiration to be there is gone. The regular guys do very little and go to bed early and get up early. I have no interest in getting up for 5 am to join them.

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India (and China, Japan, Korea, Asia) do often send us their brightest and best. Education is highly valued. Admission to best schools is very competitive. They seem to be smart and hard working—a winning combination many places.

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