Happy holidays, you’re laid off: White-collar workers bear brunt of downturn

Motyl is among tens of thousands of professional workers dealing with a rough end to 2022. PepsiCo, Amazon, Cisco and Snap have all announced plans to slash head counts in the past month or so, sowing further uncertainty heading into what could be a turbulent 2023. By November’s end, more than 80,000 tech workers had been laid off, according to an estimate by Challenger, Gray and Christmas. And many companies across finance and media, from Citigroup and Morgan Stanley to CNN, BuzzFeed and The Washington Post, have also announced they are axing employees.

For workers preparing for the holidays, the timing couldn’t be worse — although federal data shows that December and January tend to be popular months for layoffs, because corporate budgets often restart when the calendar changes.

The spike in recent layoffs is playing out differently from the pandemic-era cuts that fell heavily on hourly workers in leisure and hospitality and entertainment, while many white-collar professionals, who could work remotely, were spared.

This holiday season, it’s mostly those white-collar professionals taking the hit.

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In early December, David Weinstein learned he was being laid off from his job as vice president of productions with Complex Networks, as part of a larger restructuring by its parent company, BuzzFeed. In a note to employees affected by the cuts, BuzzFeed chief executive Jonah Peretti said the move would help the company “weather an economic downturn that I believe will extend well into 2023” and adapt to changing consumer appetites.

Weinstein, 44, had watched layoff announcements from other companies in media over the past few months, but the possibility of him being cut by BuzzFeed wasn’t on his radar.

“There’ve been layoffs all year long, it seems like, in our industry,” Weinstein said. “At this point, I feel a certain amount of solidarity with everybody else. I didn’t think about it much until it hit us.”

He’s been tapping his networks, posting more often on LinkedIn and Instagram and scheduling lunches he hopes could lead to something. He’s optimistic, but he’s also trying to be realistic.

“I also know that it’s right before Christmas and right before the new year,” Weinstein said. “I’m not counting on a new position or a new role to magically appear.”

Overall, layoffs remain near historically low levels in the broader economy. Employers are still struggling to attract and retain talent, especially in health care, restaurants and retail. More than 10.3 million positions remained unfilled at the end of October, according to the most recent data from the Bureau of Labor Statistics.

But there’s a growing sense of dissonance as the announcements keep coming in certain sectors, even as the labor market remains hot. Inflation has been straining business margins all year, and now higher interest rates are also whiplashing rate-sensitive industries like finance and tech. Companies have been turning to cost-cutting mode as they reckon with the effects of the Federal Reserve’s fight to control prices.

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Goldman Sachs is expected to cut thousands of positions and ax some bonuses as it pares back its retail banking business and prepares for a slowdown, the Wall Street Journal reported last week. The CEO of Google, which has seen slower growth this year while the company’s workforce continued to expand, sent warning signals recently of cuts to come.

“It’s really tough to predict the future,” Google chief executive Sundar Pichai said in a December all-staff meeting, declining to rule out the possibility of job cuts, according to reporting from Business Insider.

The layoffs also coincide with rising tension between white-collar employers and employees over how work is done, and could signal yet another crackdown on flexibility. Offices are still less than half as full as they were before the pandemic, according to security swipes in 10 major metro areas tracked by Kastle Systems.

Some pullbacks are to be expected at this time of year, according to Julia Pollak, chief economist at ZipRecruiter. On average, 1.9 million people are fired or laid off each month. But there has been a “definite softening” in white-collar fields compared to others, Pollack said: Six of the seven sectors that have seen the biggest declines in job postings since midyear are white-collar industries, with major drop-offs in tech, finance, law and engineering. The businesses that depend on in-person visits, in contrast, are finally recovering from drop-offs during the pandemic.

Back in September, Ceren Kalyon was on the beach in Italy, enjoying a vacation from her job at the software firm Twilio, when her phone pinged with an all-staff email from the CEO announcing 11 percent corporate layoffs and warning that targeted staff would be notified in the next 60 minutes.

“Twilio has grown at an astonishing rate over the past couple years. It was too fast, and without enough focus on our most important company priorities,” chief executive Jeff Lawson said in the email, which was shared with The Post. “I take responsibility for those decisions, as well as the decision to do with layoff.”

Panicked, Kalyon texted her manager to ask for some clarity. She never heard back, not even after she received an email saying her position had been eliminated. It left her feeling “worthless.”

“It just makes you feel like a number,” Kalyon said.

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Employers say they have been increasingly concerned about worker productivity, which plunged sharply in the first half of the year. Tech executives such as Google’s Pichai, Meta’s Mark Zuckerberg and Salesforce’s Mark Benioff have been calling out low performers and asking their workers to do more. Microsoft chief executive Satya Nadella said his company coined the term “productivity paranoia” to describe employers’ anxieties about whether their employees are working hard enough.

“We know that there’s a disconnect between employers who want employees back in the office more than employees want to be back,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas.

Up until recently, the balance of power had been tilted toward employees, thanks to the white-hot labor market. But the gathering economic storm clouds and layoff announcements have given bosses a bit more leverage, Challenger said. Now, some CEOs might be tempted to use it as a way to either bring employees back to the office or get rid of them.

“That seems like a good way to kill two birds with one stone,” Challenger said, adding that layoffs are a “very blunt tool” in the eyes of human resource professionals, who consider it a risky strategy for reducing head count. “In some ways, you lose the people who have the best ability to find new jobs.”

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In December, on what ended up being her last day of work, Marisa Mena clocked in at Nextiva like it was any other day. But a few hours later, she got a message from the company’s director of sales, asking if she had time to chat. She’d never spoken much to him, so she feared bad news.

She was right to worry: Mena was told her position was being eliminated. Little explanation was offered. It was a week after her 30th birthday, right before she was about to go on vacation to celebrate. (Nextiva did not immediately respond to a request for comment.)

Her financial goal for 2023 had been to put away money for a down payment so she could buy a house, but now that’s on hold. She’s doing Lyft and DoorDash, but she hasn’t thrown herself back into the job hunt yet.

“I wish I could have a great idea and be able to work for myself or own my own business so I don’t have to be under all of these big corporations,” Mena said. “I don’t feel like they care about us at all.”