The labor market gap in the United States increases the prospects of some workers, warns others

A sign asking for help appears in the window of a company in Brooklyn, New York.

Spencer Platt | Getty Images

Cracks are forming in the US job market as some companies try to curb hiring while others are desperate for employees.

Microsoft, Twitter, Wayfair, Hurried and parent of Facebook Half recently announced that they intend to be more cautious about adding new employees. group Other Netflix announced layoffs as demand for their products has slowed and auto sellers have slowed Carvana cut its workforce as it struggles with inflation and a plunge in stock prices.

“We will treat hiring as a privilege and consider when and where to add staff”, Over chief Dara Khosrowshahi wrote to the staff earlier this month, asking to cut costs.

U.S.-based employers reported more than 24,000 job cuts in April, up 14% from the month before and 6% more from the same month last year, according to the relocation company. Challenger, Gray & Christmas.

But airlines, restaurants and others need it fill positions. Job cuts for the first four months of the year fell by 52% compared to the same period in 2021. Just under 80,000 job cuts were announced from January to April, the lowest tally in the past three decades in which the company has tracked data.

What is emerging is the story of two labor markets, albeit not equal in size or pay. Hospitality and other service sectors cannot hire enough workers to staff what should be a lively summer recovery after two years of Covid hurdles. Technology and other large employers are warning they need to contain costs and are alerting employees.

Register job offers

WE job offers jumped to 11.55 million seasonally adjusted at the end of March, according to the latest available report from the Department of Labor, a record for data that dates back to 2000. The number of employees who left their jobs also hit a record, at over 4.5 million. Hiring amounted to 6.7 million.

Wages are increasing but not enough to keep up inflation. And people are changing where they spend their money, especially as household budgets shrink thanks to the highest rise in consumer prices in the past four decades.

Economists, employers, job seekers, investors and consumers are looking for signals on the direction of the economy and are seeing emerging divisions in the job market. The divergence could mean slowing wage growth, or hiring itself, and could eventually reduce consumer spending, which has been robust despite deteriorating consumer confidence.

Businesses, from airlines to restaurants large and small, are still failing to hire fast enough, which forces them to do so cut growth plans. Demand returned faster than expected after those companies shed workers during the pandemic-induced sales slumps.

JetBlue Airways, Delta Airlines, Southwestern Airlines Other Alaska Airlines to have resized growth plans, at least in part, due to staff shortages. JetBlue said pilot friction is higher than normal and will likely continue.

“If your churn rates are, let’s say, 2x to 3x of what you’ve seen historically, then you have to hire more pilots just to stay put,” JetBlue CEO Robin Hayes said at an investor conference on May 17. .

According to Pam Dechant, senior vice president of airport concessions, Denver International Airport concessions such as restaurants and shops have made progress with hiring, but are still short-staffed from around 500 to 600 workers to get to around 5,000.

He said many cooks earn around $ 22 an hour, up from $ 15 before the pandemic. Airport employers offer hiring, retention and, in at least one case, what she called a “if you show up for work every day this week” bonus.

Consumers “spent a lot on goods and not much on services during the pandemic and now we see in our card data that they are returning to services, literally flying by,” said David Tinsley, economist and director of the Bank of America Institutes.

“It’s a bit of a shock from those people who maybe [had] exaggerated in terms of hiring, “he said of current trends.

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The companies driving employment growth are the ones that were hit hardest at the start of the pandemic.

Jessica Jordan, managing partner of the Rothman Food Group, is struggling to hire the workers she needs for two of her Southern California businesses, Katella Deli & Bakery and Manhattan Beach Creamery. She estimates that they are both only about 75% staffed.

But help from candidates never replied to her emails for an interview, and even new hires who have already submitted their documents often disappear before their first day, without explanation, she said.

“I’m working so hard to hold their hand every step of the way, just to make sure they get there that first day,” Jordan said.

Even the largest restaurant chains have high hiring orders. The Subway sandwich chain, for example, said Thursday that it is looking to add more than 50,000 new workers this summer. Taco Bell and Inspire Brands, who own Arby’s, said they are also looking to add staff.

Hotels and restaurant services had the highest resignation rate across all industries in March, with 6.1 percent of workers leaving their jobs, according to the Bureau of Labor Statistics. The overall dropout rate was only 3% that month.

Some of these workers are completely moving away from the hospitality industry. Julia, a 19-year-old living in New York City, quit her job at a restaurant in February. She said she left due to hostility from both clients and her bosses and too many extra shifts added to her schedule at the last minute. She now she works in childcare.

“You have to work hard to get fired in this economy,” said David Kelly, chief global strategist at JP Morgan Asset Management. “You must be really incompetent and hateful.”

Slowdown in Silicon Valley

And if recovering industries are hiring to catch up, the reverse is just as true.

After a hiring boom, several large tech companies have announced hiring freezes and layoffs as concerns about an economic slowdown, the Covid-19 pandemic and the war in Ukraine hold back growth plans.

Fund-rich start-ups are also not immune, even if they are not subject to the same level of market value degradation as public tech stocks. At least 107 tech companies have laid off employees since the beginning of the year, according to Dismissals.fyiwhich tracks job cuts across the industry.

In some cases, companies like Facebook and Twitter are reacting job offers after new hires have already accepted, leaving workers like Evan Watson in a precarious position.

Last month, Watson received a job offer to join Facebook’s emerging talent and diversity division, what he called one of his “dream companies.” She informed the real estate development company she worked for and set a start date for the social media giant for May 9th.

Just three days earlier, Watson got a call about his new contract. Facebook he had recently announced it would pause hiring, and Watson anxiously speculated that he might get bad news.

“When I got the call, my heart dropped,” Watson said in an interview. Meta was freezing hiring and Watson’s onboarding was disabled.

“I was just like silent. I really didn’t have words to say,” Watson said. “Then I thought, ‘What now?’ I don’t work in my other company. “

The news left Watson disappointed, but he said Facebook offered to pay him for his layoff as he looked for a new job. Within a week, he landed a job at Microsoft as a talent scout. Watson said he “feels good” about joining Microsoft, where the company “is much more stable in terms of share prices.”

For months, retail giant Amazon dangling generous login bonuses Other free university tutoring to attract workers. The company has hired 600,000 employees since the start of 2021, but is now understaffed in its fulfillment network.

Many of the company’s recent hires are no longer needed, with Cooling of e-commerce sales growth. Additionally, employees who went on sick leave due to a spate of Covid cases returned to work earlier than expected, Amazon CFO Brian Olsavsky said during a call with analysts last month.

“Now that demand has become more predictable, there are sites in our network where we are slowing or suspending hiring to better align with our operational needs,” Amazon spokeswoman Kelly Nantel told CNBC.

Amazon did not answer questions about whether the company plans layoffs in the near future.

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