Blog Post
In 2024, major firms across various industries have laid off thousands of white-collar employees. In our industry, consulting giants like Deloitte, Ernst & Young, KPMG, and PwC have collectively shed over 9,000 jobs (Intellizence |). Accenture has announced cuts affecting 19,000 employees, primarily targeting administrative roles (Going Concern) and other, smaller firms like Slalom and West Monroe have quietly shed 7% - 13% of their teams.
According to layoffs.fyi tech companies Google, Meta, Amazon, Microsoft, Salesforce, SAP, Cisco, IBM, and Dell have all laid off thousands of workers as they adjust to a post-pandemic economy that demands different skill sets and focuses more on automation and efficiency.
Data published in Business Insider shows that in the financial sector, Goldman Sachs, Citigroup, and Wells Fargo have cut thousands of jobs due to restructuring and cost-cutting measures. Manufacturing and consumer products companies like Tesla, Dow, Nike, Steallantis, Miele, Siemens, Estee Lauder, and Toshiba have already, or are in the process of letting hundreds or thousands of white-collar workers go, as are companies like UPS, Paypal, Paramount, Expedia and many others.
While the white-collar job market contracts, the blue-collar sector tells a different story. The demand for blue-collar workers remains robust, driven by a resurgence in the manufacturing, construction, and logistics sectors. According to the Bureau of Labor Statistics, job vacancies in these sectors have remained steady or even increased in some areas, reflecting ongoing infrastructure projects and a booming e-commerce market that requires a steady supply of labor for warehousing and delivery services.
The employment rates among white-collar workers have seen a noticeable dip. The professional and business services sector, which includes many white-collar jobs, reported a rise in unemployment rates from 3.1% in January 2024 to 4.0% by mid-year. In contrast, blue-collar sectors such as construction and manufacturing have maintained lower unemployment rates, hovering around 3.5% and 3.7%, respectively. Vanguard’s report on hiring shows the hiring rate for people who make less than $55K has held up while for people making more than $96K, it has slowed dramatically. Except for a couple of months at the beginning of the pandemic, it’s the worst it has been since 2014.
Some people believe this white-collar recession is a temporary adjustment as industries recalibrate post-pandemic. Others believe this could be a more prolonged period of adjustment that indicates deeper structural changes in the economy driven by remote work, AI, and digital transformation.
Many of the companies that are cutting back are not struggling and/or have significant cash reserves. So, it might also be that companies are finally cutting back on corporate bloat, saving money for a rainy day, or building a nest egg to be spent on a big acquisition or investment in something new like AI.
We have also heard from some of our clients that the combination of economic uncertainty driven by inflation, interest rates, and elections, in the US, and around the world, and the impact of wars in Europe (i.e. Ukraine) and maybe Asia (Taiwan) on global trade and supply chains is causing companies to trim costs now just in case tough times are ahead.
While the root causes aren’t clear, the US job market in 2024 is experiencing a clear dichotomy: white-collar jobs are facing a possible recession with significant layoffs and higher unemployment rates and blue-collar jobs continue to thrive with stable or increasing demand.
Successfully navigating these changing waters will require dexterity, determination, and diligence. Will fortune favor the bold or the cautious? Only time will tell.
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