by The work is cut into
goal
The platforms are huge, but not exceptional. Many other companies are moving even more aggressively.
Meta (ticker: META), Facebook’s parent, said last week it would cut 10,000 jobs and cancel 5,000 unfilled jobs. The cuts come less than six months after the company announced 11,000 layoffs in November as CEO Mark Zuckerberg seeks to make the business more efficient.
This isn’t the worst: Barron’s took a look at how staffing levels in
S&P 500
companies changed during 2022. Many companies made deeper cuts than the 21,000 jobs eliminated at Facebook.
More companies announced layoffs this year. And fewer openings are available.
By 2022, healthcare provider
Human
(HUM), for example, cut nearly a third of its workforce last year, down from 96,900 at the end of 2021 to 67,100. Insurance company
American International Group
(AIG) laid off about 10,000 people from its workforce of 36,600, representing a 28% cut, while
Mc Donald’s
‘s (MCD) reduced its headcount by 25% to 150,000 from 200,000.
Meta’s headcount increased by 20% last year, although most of the 11,000 cuts announced in November were not included in the year-end figures. The 11,000 reductions, plus the 10,000 layoffs announced last week, would represent 24% of the approximately 86,000 people working for the company at the end of 2022.
Other companies that have cut a significant portion of their workforce in the past year include
Stanley Black & Decker
(SWK),
MGM Resorts International
(MG) and
ATT
(T).
It is important to note that layoffs are not the only reason for changes in headcount. Spin-offs, or sales of parts of the business, can also lead to a significant drop in headcount.
When it comes to absolute numbers,
amazon.com
(AMZN) did the most damage. The e-commerce giant removed 67,000 people from its payroll in 2022, the most among companies in the S&P 500. But as the company employed more than 1.6 million people at the end of 2021, the cut was just 4% of its total workforce.
FedEx (FDX), human resources consulting firm
Robert Half International
(RHI),
ford engine
(F), Target (TGT) and
Wells Fargo
(WFC) also cut many jobs, but the reductions were relatively small compared to the overall workforce.
January jobs data suggest that the trend has not abated. According to the Bureau of Labor Statistics, the number of job losses jumped from 240,000 from the previous month to 1.7 million, the highest level since 2020, even though non-farm payrolls increased by 517,000 net jobs.
The biggest increase in job losses came from the professional and commercial services sector, which includes many technology companies. In recent years, industry layoffs have generally been around or below 400,000 a month, but in January the total reached 528,000, second only to levels at the height of the pandemic.
At the same time, the number of job openings has fallen since its peak last spring, while the number of hires has remained relatively stable. This means that jobs are disappearing because companies are reducing their hiring plans, not because jobs have been filled.
In January, the number of job openings dropped by 410,000 to around 10.8 million. The biggest drop did not occur in professional services, but in the construction and housing sector, followed by the financial and insurance sectors.
Job postings on the hiring site Indeed have been declining since the start of 2022, but the drop has picked up in recent months. The number was most recently updated a week ago.
According to the Computing Technology Industry Association, job openings for technology positions in the US decreased by 40,000, or 15%, in February from the previous month. This implies that the government job openings data for February may show further weakness when it becomes available.
In today’s environment, a leaner workforce might be smart for some companies.
Take Meta, whose workforce is 10 times larger than it was a decade ago. According to the company’s annual records, the team has grown from around 6,300 people in 2013 to over 86,000 in 2022.
At first, the expansion was accompanied by strong growth. In 2016, Facebook made nearly $28 billion with around 17,000 employees, which is about $1.6 million for each person on the team.
By 2022, revenue had risen to $116 billion, but because the workforce was larger, the figure per worker was $638,000, less than half the 2016 figure.
“For most of our history, we’ve seen rapid revenue growth year over year and had the resources to invest in many new products,” Zuckerberg wrote Tuesday in a letter announcing the layoffs to his team, “but the past year has been a humiliating awakening. call. The world economy has changed, competitive pressures have increased and our growth has slowed considerably.”
Write to Evie Liu at evie.liu@barrons.com
