Finance

Monzo has raised $430 million in a new funding round led by CapitalG, the independent venture arm of Google parent company Alphabet.
Monzo said the fresh cash would be used to accelerate its expansion plans, including a renewed attempt at expanding its service to the U.S.
It comes after Monzo reported bumper growth in 2023 and entered the black for the first time in the first two months of 2023.

Monzo CEO TS Anil.

British digital bank Monzo on Tuesday raised $430 million in fresh capital from investors to help it relaunch its services in the U.S.
Monzo raised the money in a new funding round led by CapitalG, the independent venture arm of Google parent company Alphabet.

HongShan, the Chinese venture capital firm that split from Sequoia Capital last year, also backed the round, alongside existing backers Tencent and Passion Capital.
Monzo, which is one of the U.K.’s most popular app-only banks, said the fresh cash would be used to accelerate its expansion plans. The bank’s CEO, TS Anil, told the Financial Times the capital would allow Monzo to crack the U.S. market after its previous foray was curtailed by U.S. regulators.
“With backing from global investors, we have the rocket fuel to go after our ambitions harder and faster, building Monzo into the one app that sits at the centre of our customers’ financial lives,” Monzo CEO TS Anil said in a statement.
“Each milestone we’ve reached to this point has given us more strength and speed to make strides towards our mission — now we’ll scale to even greater heights and seize the huge opportunity ahead.”

The fresh cash comes off the back of bumper growth for Monzo in 2023.

The U.K. neobank entered the black for the first time in the first two months of 2023. That came as Monzo reported 88% growth in revenues to £214.5 million ($272 million), up from £114 million in 2022.

Relaunching in the U.S.

A fair portion of the cash will be allocated toward helping Monzo relaunch its services in the U.S.
Monzo previously tried launching in the U.S. in 2019, with a beta product available for American consumers. The company was live in the U.S. via a partnership with the community bank Sutton Bank.
It wanted to acquire a full U.S. bank license, but it was forced to abandon this plan in 2021 after a fruitless two-year discourse with regulatory authorities.
Monzo has since opted to focus on re-entering the U.S. with a partnership that would allow it to bypass the requirement of getting a full bank license to serve U.S. customers.
The firm began a search for a U.S. CEO in 2023 to spearhead a renewed attempt at cracking the American market. It hired Conor Walsh, a former executive at fintech firm Block’s Cash App division, as its new U.S. CEO in October 2023.
Monzo’s new round also comes after a focus on new products for the bank. Monzo made its first foray into investment products in 2023, launching investment pots that allow customers to park their cash at a range of funds managed by BlackRock with different levels of risk.
Monzo said it now has more than 9 million retail customers in the U.K., and that it added 2 million of those clients in 2023 alone. The company also has 400,000 business banking customers. More

Inflation hit an annual 29.9% in January, driven by soaring food prices that have triggered a cost-of-living crisis in Africa’s largest economy, while the currency plunged to an all-time low last month.
The IMF called improvements in government revenue collection and oil production “encouraging,” along with the Central Bank of Nigeria’s recent decision to hike interest rates.
Data last week showed that private sector momentum in Nigeria slowed last month, with the Stanbic IBTC Bank PMI (purchasing managers’ index) dropping to 51.0 from 54.5 in January.

IBADAN, Nigeria – Feb. 19, 2024: Demonstrators hold placards during a protest against the hike in price and hard living conditions in Ibadan on February 19, 2024.
Samuel Alabi | Afp | Getty Images

Nigeria is battling to contain a historic currency crisis and soaring inflation, with the International Monetary Fund on Monday warning that almost one in 10 people are facing food insecurity.
Inflation hit an annual 29.9% in January, driven by soaring food prices that have triggered a cost-of-living crisis in Africa’s largest economy. The naira currency, meanwhile, plunged to an all-time low of around 1,600 against the U.S. dollar in late February.

President Bola Tinubu’s government came to power in May 2023, inheriting a highly precarious economic situation, characterized by anemic growth, rising inflation, low revenue collection and import-export imbalances that had accumulated over many years.
His administration promptly launched a raft of economic reforms aimed at liberalizing the economy, such as the removal of fuel subsidies and the relaxation of currency controls.
Though welcomed by foreign investors, the short-term impact has been an uncorking of the various macroeconomic issues that had been artificially contained by the interventionist policies.

LAGOS, Nigeria – Sept. 25, 2023: Street currency dealers at a market in Lagos, Nigeria.
Bloomberg | Bloomberg | Getty Images

IMF staff completed a mission to Nigeria in February and noted on Monday that although economic growth reached 2.8% in 2023, this falls slightly short of the level needed to support the country’s rapid population growth.
“Improved oil production and an expected better harvest in the second half of the year are positive for 2024 GDP growth, which is projected to reach 3.2 percent, although high inflation, naira weakness, and policy tightening will provide headwinds,” the Washington, D.C.-based organization said in its report on the country.

“With about 8 percent of Nigerians deemed food insecure, addressing rising food insecurity is the immediate policy priority.”
However, the IMF welcomed Nigeria’s approval of an “effective and well-targeted social protection system” along with the government’s release of grains, seeds and fertilizers and introduction of dry-season farming.
IMF commends government, central bank efforts
Mission staff noted recent improvements in government revenue collection and oil production as “encouraging,” along with the Central Bank of Nigeria’s recent decision to hike interest rates by 400 basis points to 22.75%, in a bid to contain inflation and ease pressure on the naira. This has triggered a slight strengthening of the currency in recent days.
“The interest rate announcement received a cautious welcome from investors, with the naira gaining some ground against the dollar in the official and parallel markets,” said David Omojomolo, Africa economist at Capital Economics.
“Much of positive reaction was thanks to the scale of the hike, which took the consensus (but not ourselves) by surprise. Also helpful was the recommitment to an inflation targeting framework.”
However, he suggested that there was some cause for concern in the accompanying speech from CBN Governor Olayemi Cardoso, who seemed worried by government policy.

IBADAN, Nigeria – Feb. 19, 2024: Demonstrators are seen at a protest against the hike in price and hard living conditions in Ibadan on February 19, 2024.
Samuel Alabi | Afp | Getty Images

“He delicately cast some of the inflation problem on ‘non-monetary factors’ including persistent infrastructure and insecurity problems,” Omojomolo said in a note Friday.
“He also pointed the finger at loose fiscal policy – Mr. Cardoso probably feels that the CBN’s inflation fight is not being helped by the government’s decision to reintroduce cash transfers to households.”
The central bank’s strategy for stabilizing the naira is also unconvincing, according to Omojomolo.
“Rate hikes will help attract dollars via foreign investment, but [Cardoso] and the government’s focus on alleged foreign exchange speculation shows that the authorities are still reluctant to let the naira move with market forces,” he added.
“Failure to resist these interventionist tendencies risks a fresh build-up of macro-imbalances that lay at the heart of the recent currency and inflation crisis and require monetary policy to be kept tighter for even longer at the expense of economic growth.”
Private sector momentum slowing
Data last week showed that private sector momentum in Nigeria slowed in February, with the Stanbic IBTC Bank PMI (purchasing managers’ index) dropping to 51.0 from 54.5 in January.
Any reading above 50 represents an expansion, and Nigerian PMIs have remained in positive territory for the past three months. However, the full-year average declined from 53.9 in 2022 to 50.4 in 2023.
Pieter Scribante, senior political economist at Oxford Economics Africa, said that high input price and output cost inflation were stifling private sector confidence and business activity.
“Disruptions in the non-oil economy, currency volatility, spiking inflation, higher fuel and transport costs, and food shortages should remain issues throughout 2024, while mounting price pressures, policy uncertainty, and softening consumer spending dampen economic activity and growth,” Scribante said in a research note Monday.
Oxford Economics expects real GDP growth of 2.8% in 2024 as improvements in the hydrocarbon sector offset the weakness in the non-oil economy.
“This year, recovering domestic industries, higher foreign investments, and easing inflation are upside risks,” Scribante added.
“In contrast, downside risk factors are sticky prices, exchange rate weakness, oil price volatility, and domestic insecurity.” More

Moody’s slashed one of New York Community Bank’s key ratings for the second time in a month.
As a result, the regional lender might have to pay more to retain deposits, according to analysts who track the company.
NYCB finds itself in a stock freefall that began a month ago when it reported a surprise fourth-quarter loss and steeper provisions for loan losses.
It fell a further 23% on Monday.

A sign is pictured above a branch of New York Community Bank in Yonkers, New York, on Jan. 31, 2024.
Mike Segar | Reuters

Regional lender New York Community Bank may have to pay more to retain deposits after one of the company’s key ratings was slashed for the second time in a month.
Late Friday, Moody’s Investors Service cut the deposit rating of NYCB’s main banking subsidiary by four notches, to Ba3 from Baa2, putting it three levels below investment grade. That followed a two-notch cut from Moody’s in early February.

The downgrade could trigger contractual obligations from business clients of NYCB who require the bank to maintain an investment grade deposit rating, according to analysts who track the company. Consumer deposits at FDIC-insured banks are covered up to $250,000.
NYCB has found itself in a stock freefall that began a month ago when it reported a surprise fourth-quarter loss and steeper provisions for loan losses. Concerns intensified last week after the bank’s new management found “material weaknesses” in the way it reviewed its commercial loans. Shares of the bank have fallen 73% this year, including a 23% decline Monday, and now trade hands for less than $3 apiece.
Of key interest for analysts and investors is the status of NYCB’s deposits. Last month, the bank said it had $83 billion in deposits as of Feb. 5, and that 72% of those were insured or collateralized. But the figures are from the day before Moody’s began slashing the bank’s ratings, sparking speculation about possible flight of deposits since then.
The Moody’s ratings cuts could affect funds in at least two areas: a “Banking as a Service” business with $7.8 billion in deposits as of a May regulatory filing, and a mortgage escrow unit with between $6 billion and $8 billion in deposits.
“There is potential risk to servicing deposits in the event of a downgrade,” Citigroup analyst Keith Horowitz said in a Feb. 4 research note.

NYCB executives told Horowitz that the deposit rating, which Moody’s had pegged at A3 at the time, would have to fall four notches before being at risk. It has fallen six notches since that note was published.
During a Feb. 7 conference call, NYCB Chief Financial Officer John Pinto confirmed that the bank’s mortgage escrow business needed to maintain an investment grade status and said that deposit levels in the unit fluctuated between $6 billion and $8 billion.
“If there’s a contract with these depositors that you have to be investment grade, theoretically that would be a triggering event,” KBW analyst Chris McGratty said of the Moody’s downgrade.
NYCB didn’t immediately respond to CNBC’s calls or an email seeking comment.
It couldn’t be determined what the contracts force NYCB to do in the event of it breaching investment grade status, or whether downgrades from multiple ratings firms would be needed to trigger contractual provisions. For instance, while Fitch Ratings cut NYCB’s credit ratings to junk last week, it kept the bank’s long-term uninsured deposits at BBB-, one level above junk.
To replace deposits, NYCB could raise brokered deposits, issue new debt or borrow from the Federal Reserve’s facilities, but that would all probably come at a higher cost, McGratty said.
“They will do whatever it takes to keep deposits in house, but as this scenario is playing out, it may become more cost prohibitive to fund the balance sheet,” McGratty said.Don’t miss these stories from CNBC PRO: More

Heading into what will likely be the Conservative government’s last fiscal event before the country’s upcoming general election, Hunt is under pressure to offer a sweetener to voters.
His party trails the main opposition Labour Party by more than 20 points across all national polls.
Deutsche Bank estimates that the government’s fiscal headroom will have grown from around £13 billion ($16.46 billion) to around £18.5 billion, and sees tax cuts as “very likely” the first port of call.

British Finance Minister Jeremy Hunt said earlier this month the U.K. would not enter a recession this year.
Hannah Mckay | Reuters

LONDON — Economists expect U.K. Finance Minister Jeremy Hunt to use a small fiscal windfall to deliver a modest package of tax cuts at his Spring Budget on Wednesday.
Heading into what will likely be the Conservative government’s last fiscal event before the country’s upcoming General Election, Hunt is under pressure to offer a sweetener to voters as his party trails the main opposition Labour Party by more than 20 points across all national polls.

But he must also navigate the constraints of fragile public finances and a stagnant economy that recently entered a modest technical recession.
On the upside, inflation has fallen faster than anticipated and market expectations for interest rates are well below where they were going into Hunt’s Autumn Statement in November.
The Treasury pre-announced plans over the weekend to deliver up to £1.8 billion ($2.3 billion) worth of benefits by boosting public sector productivity, including releasing police time for more frontline work.
The Independent Office for Budget Responsibility estimates that returning to levels of pre-pandemic productivity could save the Treasury up to £20 billion per year.
Hunt will also announce £360 million in funding to boost research and development (R&D) and manufacturing projects across the life sciences, automotive and aerospace sectors, the Treasury said Monday.

However, the big questions over tax cuts remain heading into Wednesday’s statement.
Increased fiscal headroom
“On balance, we think Chancellor Hunt’s fiscal headroom will have likely increased – but only marginally, and nowhere close to what he had in the Autumn Statement (owing largely to the fall in expected debt costs),” Deutsche Bank Senior Economist Sanjay Raja said in a research note Thursday.
The German lender estimates that the government’s fiscal headroom will have grown from around £13 billion to around £18.5 billion, and that tax cuts are “very likely” the first port of call. Raja suggested the finance minister will err on the side of caution in loosening fiscal policy, favoring supply side support over boosting demand.
“Supply side measures are more likely in our view, particularly with the Bank of England more amenable to loosening monetary policy,” Raja said.
“Therefore, tax cuts to national insurance contributions (NICs) and changes to child benefits are more likely to come in the Spring Budget (in contrast to earlier expectations of income tax cuts).”

A substantial cut to National Insurance was the highlight of Hunt’s Autumn Statement, though economists were quick to point out that its benefit to payers would be more than erased by the effect of existing freezes on personal income tax thresholds — known as the “fiscal drag.”
The U.K. National Insurance is a tax on workers’ income and employers’ profits to pay for state social security benefits, including the state pension.
Raja also suggested an extension of the government’s existing freeze on fuel duty remains a possibility, and that some spending cuts will likely be used to partially offset a loosening of fiscal policy.
In total, Deutsche Bank expects Hunt to deliver net loosening of £15 billion over the coming fiscal year, dropping to around £12.5 billion in the medium-term.
“The outlook for the public finances remains precarious. Slight changes to the macroeconomic outlook could result in big shifts to the public finances. The Chancellor continues to walk a fine line between managing his fiscal rules now and rising austerity later,” Raja said.
“To be sure, big questions on the public finances remain – including whether spending cuts, or limited rises in some areas, remain realistic to tackle the rising strain in public services, and the Government’s own ambitions around net-zero, defence, and overseas development spending.”
BNP Paribas economists expect a more modest package of tax cuts worth around £10 billion across the 2024/25 fiscal year, and projected that the government will start the year with a fiscal windfall of around £11 billion.

The French bank agreed that the reductions will be aimed at stimulating labor supply, with “little impact on inflation and thus the Bank of England.”
“Our base case is that the government will spend GBP10bn of the near-term fiscal windfall and use the additional medium-term fiscal space to cut personal taxes,” economists Matthew Swannell and Dani Stoilova said in a research note entitled “last-chance saloon.”
They also expect the Treasury to postpone the March 2024 rise in fuel duty for another 12 months, at a cost of £3.7 billion a year, and to introduce a permanent 1 pence reduction in the basic rate of income tax at a cost of between £6 billion and £7.35 billion per year.
“The overall effect of this policy package would be to leave medium-term fiscal headroom roughly back where it started at GBP12.7bn,” they added.
“With the Conservative party trailing in the opinion polls and the Budget possibly the last opportunity to loosen fiscal policy before a general election, we expect Chancellor Hunt to once again, at least, spend any additional fiscal space available to him.” More

The Toronto Stock Exchange’s parent company has already completed a major deal this year: its acquisition of ETF education company VettaFi.
According to TMX Group CEO John McKenzie, the deal helps expand its exchange-traded fund business globally.

“The exchange-traded fund is essentially one of the most important innovations in investing in the marketplace history — at least in the last 20 [to] 30 years,” McKenzie told CNBC’s “ETF Edge” this week. “What we were really looking to do is … get deeper into providing more support to our clients.”
Even though ETF activity has cooled off from its 2022 records, action in 2023 was still above previous years, according to iShares data.
McKenzie plans to utilize the VettaFi acquisition to facilitate more ETF creation.
“ETF providers can create new products and great solutions so that they can reach a broader investing audience,” McKenzie said. “That’s the one two punch of what we’re doing with that investment.”
TMX’s ETF Screener lists 1,264 ETFs and ETF-related funds on the Toronto Stock Exchange as of Friday.

With VettaFi in the exchange’s tool belt, McKenzie hopes to create new ETFs focusing on Canada’s economic strengths and how they can reach international investors.
“We want to be more global than local,” added McKenzie. “This is a great asset to help us build not just in the U.S., not just in Canada, but around the world.”
Since the acquisition was completed on Jan. 2, TMX shares are up 11%.
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Regional lender New York Community Bank finds itself in an apparently worsening predicament, just as the anniversary of last year’s banking turmoil nears.
NYCB restated recent quarterly earnings lower by $2.4 billion, formally replaced its CEO and delayed the release of a key annual report.
Shares of the troubled lender plunged 25% Friday to a 52-week low below $4 apiece.
The most worrying development is directly tied to investors’ fears about commercial real estate and shortfalls the bank reported in a key aspect of its business.

A sign is pictured above a branch of the New York Community Bank in Yonkers, New York, U.S., January 31, 2024.
Mike Segar | Reuters

Regional lender New York Community Bank finds itself in an apparently worsening predicament just as the anniversary of last year’s banking turmoil nears.
Shares of the troubled lender plunged 25% on Friday to below $4 apiece after NYCB restated recent quarterly earnings lower by $2.4 billion, formally replaced its CEO and delayed the release of a key annual report.

The most worrying development, though, is directly tied to investors’ fears about commercial real estate and shortfalls the bank reported in a key aspect of its business: NYCB said that poor oversight led to “material weaknesses” in the way it reviewed its portfolio of loans.

The disclosure is a “significant concern that suggests credit costs could be higher for an extended period,” Raymond James analyst Steve Moss said Thursday in a research note. “The disclosures add to our concern about NYCB’s interest-only multi-family portfolio, which may require a long workout period unless interest rates decline.”
In a remarkable reversal of fortunes, a year after deposit runs consumed regional lenders including Silicon Valley Bank, NYCB — one of the perceived winners from that period after acquiring a chunk of the assets of Signature Bank following government seizure — is now facing existential questions of its own.

Tough quarter

The bank’s trajectory shifted suddenly a month ago after a disastrous fourth-quarter report in which it posted a surprise loss, slashed its dividend and shocked analysts with its level of loan loss provisions.
Days later, ratings agency Moody’s cut the bank’s credit ratings two notches to junk on concerns over the bank’s risk management capabilities after the departure of NYCB’s chief risk officer and chief audit executive.

At the time, some analysts were comforted by the steps NYCB took to shore up its capital, and noted that the promotion of former Flagstar CEO Alessandro DiNello to executive chairman boosted confidence in management. The bank’s stock was briefly buoyed by a flurry of insider purchases indicating executives’ confidence in the bank.
DiNello became CEO as of Thursday after his predecessor stepped down.

Deposit update?

Now, some are questioning the stability of NYCB’s deposits amid the tumult. Last month, the bank said it had $83 billion in deposits as of Feb. 5, a slight increase from year-end. Most of those deposits were insured, and it had ample resources to tap if uninsured deposits left the bank, it said.
“NYCB still has not provided an update on deposits, which we can only infer … are down,” D.A. Davidson analyst Peter Winter said Thursday in a note.
“The question is, by how much?” Winter asked. “In our view, corporate treasurers were reassessing if they are going to keep deposits at NYCB when their debt rating was downgraded to junk.”
In a statement released Friday announcing a new chief risk officer and chief audit executive, NYCB CEO DiNello noted that he had identified the weaknesses disclosed Thursday and is “taking the necessary steps to address them.” The bank’s allowance for credit losses isn’t expected to change, he added.
“The company has strong liquidity and a solid deposit base, and I am confident we will execute on our turnaround plan,” DiNello said.

Key stock level pierced

The pressure on NYCB’s operations and profitability amid elevated interest rates and a murky outlook for loan defaults has raised questions as to whether NYCB, a serial acquirer of banks until recently, will be forced to sell itself to a more stable partner.
Ben Emons, head of fixed income for NewEdge Wealth, noted that banks trading for less than $5 a share are perceived by markets as being at risk for government seizure.
A NYCB representative didn’t immediately return a request for comment.
For now, the concern seems to be limited to NYCB, where commercial real estate makes up a greater proportion of loans compared with some rivals. While NYCB stock notched a 52-week low of $3.32 per share on Friday, other bank indexes saw only slight declines.
“We expect more questions on whether NYCB will sell,” Citigroup analyst Keith Horowitz said in a note. “But we do not see a lot of potential buyers here even at this price due to the uncertainty … in our view, NYCB is on its own.”
— CNBC’s Tom Rotunno and Michael Bloom contributed to this story.
Don’t miss these stories from CNBC PRO: More

The regional bank announced that Alessandro DiNello, its executive chairman, is taking on the roles of president and CEO, effective immediately.
NYCB has been under pressure in recent months due in part to concerns about its exposure to commercial real estate.
The bank also announced an amendment to its fourth-quarter results, adding a disclosure about its internal risk management.

A New York Community Bank stands in Brooklyn, New York City, on Feb. 8, 2024.
Spencer Platt | Getty Images

Shares of New York Community Bancorp fell more than 20% in extended trading Thursday after the regional lender announced a leadership change and disclosed issues with its internal controls.
The regional bank announced that Alessandro DiNello, its executive chairman, is taking on the roles of president and CEO, effective immediately. NYCB has been under pressure in recent months due in part to concerns about its exposure to commercial real estate.

Stock chart icon

Shares of NYCB dropped sharply in after hours trading.

The bank also announced an amendment to its fourth-quarter results, adding a disclosure about its internal risk management.
“As part of management’s assessment of the Company’s internal controls, management identified material weaknesses in the Company’s internal controls related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities,” the company said in a filing with the U.S. Securities and Exchange Commission.
DiNello previously served as the CEO of Flagstar Bank, which NYCB acquired in 2022. He was named executive chairman at NYCB earlier in February just after Moody’s Investors Service downgraded the bank’s credit rating to junk status.
“While we’ve faced recent challenges, we are confident in the direction of our bank and our ability to deliver for our customers, employees and shareholders in the long-term. The changes we’re making to our Board and leadership team are reflective of a new chapter that is underway,” DiNello said in a press release Thursday.
In another leadership change, Marshall Lux was elevated to presiding director of the NYCB board, replacing Hanif Dahya. Lux served as global chief risk officer for Chase Consumer Bank at JP Morgan from 2007 to 2009, according to the press release.

Shares of NYCB are down 53% year to date, sparked by its disclosure on Jan. 31 that it took a larger-than-expected charge against potential loan losses.
The specter of loan losses reignited fears about the state of the commercial real estate market and regional banks more broadly. Several regional banks failed in 2023 after customers and investors became uneasy about the value of the debt on bank balance sheets, including Silicon Valley Bank.
NYCB was actually the acquirer of one of those failed banks, Signature, in March of last year.Don’t miss these stories from CNBC PRO: More

Job seekers and employers are increasingly “ghosting” each other during the hiring process.
A hot job market and “circular” behavior have led the practice to become more common in recent years, said career experts.
However, ghosting risks reputational harm in the long run, they said.

Fotostorm | E+ | Getty Images

“Ghosting” isn’t just a dating phenomenon: It has grown more common at the workplace, too. And that unreliable behavior risks reputational harm to employers and job seekers, said career experts.
The concept of ghosting — abruptly and unexpectedly ceasing communication with someone (i.e., disappearing) — arose around the mid-2010s as social media and dating apps gained prominence. Merriam-Webster added this new-age definition of “ghost” to the dictionary in 2017.

The practice has become common among both job applicants and employers during the hiring process.
More from Personal Finance:How to get by without a paycheck after a job lossAmid mass layoffs, it’s best to take a new approach to job searchesWorkers are sour on the job market — but it may not be warranted
About 78% of job seekers said they’d ghosted a prospective employer, according to a December report from the job site Indeed, based on a poll conducted in spring 2023. That’s up from the prior year, when 68% said they’d gone AWOL during the hiring process sometime over their career.
Roughly 62% of job seekers said they plan to ghost during future job searches, up from 56% in 2022 and 37% in 2019, Indeed found.
But it’s not just applicants who disappear: 40% of job seekers said an employer had ghosted them after a second- or third-round interview, up from 30% in 2022.

The data suggests ghosting is “still trending upward” and isn’t a “passing fad,” according to the Indeed report.

Why job ghosting is becoming more common

It’s not as if ghosting is a new phenomenon. There have always been job seekers and employers who’ve displayed lackluster communication during hiring, said Jill Eubank, senior vice president of business professionals at Randstad, a recruitment firm.
Its prevalence in recent years is likely attributable to a hot job market heading into the Covid-19 pandemic and then exiting it, she said.
Demand for labor surged in early 2021 as the U.S. economy reopened from its pandemic-related doldrums. The unemployment rate has hovered near historic lows for about two years, and layoffs for nearly three years. Job openings — a proxy for businesses’ need for workers — hit historic highs in the pandemic era; so did quits, a barometer of workers’ ability or willingness to get jobs elsewhere.

While the job market has gradually cooled, it’s still strong, Eubank said.
Job candidates likely felt they had abundant choice and a high likelihood of success, and ghosting swelled as a result, she said.
“They feel that they have options: ‘I don’t have to communicate because I can just go over here [for a job], or I have this other opportunity,'” Eubank said.

Why ghosting has become a feedback loop

Maskot | Maskot | Getty Images

About 1 in 6 millennial and Generation Z workers have ghosted a prospective employer during the interview process, primarily because they no longer wanted the job, got another job offer or had a bad interview experience, according to a 2023 poll by the Thriving Center of Psychology, a mental health platform.
Two-thirds — 66% — of workers have “ghosted” employers by accepting a job offer and then retracting it, or disappearing, before their start date, according to a 2019 poll by Randstad.

As a coach, I’d never recommend that a job seeker ghost an employer.

Clint Carrens
career strategist at Indeed

Additionally, 35% of workers said they’d been ghosted by employers during the interview process, according to the Thriving Center of Psychology.
The problem has morphed into a feedback loop, said Clint Carrens, a career strategist at Indeed’s Job Search Academy.
“You’ve got job seekers feeling employers are getting worse at ghosting,” Carrens said. “Many are taking the approach that if employers consider it normal etiquette, then they will also engage in that behavior. It’s almost a circular problem.”

However, ghosting carries risks for both parties via potential reputational damage, experts said.
“As a coach, I’d never recommend that a job seeker ghost an employer,” Carrens said.
Those who do may be “red flagged” by the employer and lose access to a future job opportunity, for example, he said.
Employers may feel ghosting gets them a short-term win by cutting time during the hiring process, but it also hurts their brands in the long run, especially if job seekers speak out about their negative experience online, Carrens added. More