Layoffs and Job Reductions

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    U.S. Survey Shows an Uptick in Job Openings, and Not in Layoffs

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    The Labor Department found a rise in the number of posted jobs per worker in December, despite the Fed’s efforts to cool the labor market.The nation’s demand for labor only got stronger in December, the Labor Department reported on Wednesday, as job openings rose to 11 million.That brings the number of posted jobs per available unemployed worker, which had been easing in recent months, back up to 1.9 — not what the Federal Reserve has been hoping for as it seeks to quell inflation.“It does make you question whether we continue to see that slowing in net job creation,” said Kathy Bostjancic, chief economist at the financial services company Nationwide. “There’s still a strong demand for workers, and that suggests that the labor market is still running very tight, and too hot.”The 5.5 percent increase in job openings was largely driven by hotels and restaurants, which have been steadily recovering from the pandemic, and jumped sharply to 1.74 million positions posted. Jerome H. Powell, the Fed chair, has been particularly focused on wage inflation in the services sector, but like wages more broadly, increases in hourly earnings in private services have been decelerating.In another sign of confidence among workers, people voluntarily left their jobs at about the same rate as they did in November. Quits as a share of the overall employment base have fallen slightly from 3 percent at the end of 2021, but plateaued over the past few months. Overall, in 2022, about 50 million Americans quit their jobs.Layoffs were also steady in December, staying at the unusually low level that has prevailed since a spike during the pandemic. While pink slips in the tech industry have mounted swiftly — most recently with 22,000 between Microsoft and Google — the bulk of the separations may have occurred after the labor turnover survey ended.Other indicators that employers are shedding workers, such as initial claims for unemployment insurance, have also remained very low by historical standards. Those leaving tech jobs, especially with software development and engineering skills, may have found new opportunities so quickly that they didn’t file for unemployment benefits. More

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    With Layoffs, Retailers Aim to Be Safe Rather Than Sorry (Again)

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    Companies that ramped up hiring in areas like technology over the past few years are cutting back as customers slow their spending.The retail industry is trying to figure out its correct size.Retailers, faced with sky-high demand from shoppers during the pandemic, spent the past three years ramping up their operations in areas like human resources, finance and technology. Now, times have changed.A public that rushed to buy all sorts of goods in the earlier parts of the pandemic is now spending less on merchandise like furniture and clothing. E-commerce, which boomed during lockdowns, has fallen from those heights. And with consumers worried about inflation in the prices of day-to-day necessities like food, companies are playing defense.Saks Off 5th, the off-price retailer owned by Hudson Bay, laid off an unspecified number of workers on Tuesday. Saks.com is laying off about 100 employees, or 3.5 percent of its workers. Stitch Fix laid off 20 percent of its salaried workers this month and closed a distribution center in Salt Lake City. Last week, Wayfair said it would lay off 1,750 people, or 10 percent of its work force, and Amazon started laying off 18,000 workers, many of them in its retail division. Bed Bath & Beyond cut its work force this month as it tries to shore up its finances and prepares for a possible bankruptcy filing.While it’s not unusual for major retailers to announce store closings and some job cuts after the blitz of the holiday season, the recent spate of layoffs is more about structural changes as the industry recalibrates itself after the rapid growth from pandemic-fueled shopping. And it accompanies broader worries about the state of the U.S. economy and layoffs by prominent tech companies.“Retailers are really being cognizant of capital preservation,” said Catherine Lepard, who leads the global retail market for the executive search firm Heidrick & Struggles. “They don’t know how long this cooler economy is going to last, and they want to make sure they have the right cash to get through that. For retailers that are struggling, it really means tightening the belt with some cost cutting.”Sales during the all-important holiday shopping season were weaker than in years past, when growth hit record levels. December retail sales increased 6 percent from the same period last year, but that number was not adjusted for inflation, which was at 6.5 percent.Department stores posted sizable sales declines. At Nordstrom, sales in the last nine weeks of 2022 decreased 3.5 percent from a year earlier, with the company noting that they “were softer than prepandemic levels.” Macy’s said its holiday sales had been on the lower end of its expectations.Macy’s holiday sales were on the lower end of expectations, the company said. Mathias Wasik for The New York TimesThe layoffs at certain retail companies are a sign that the industry is bracing for a slowdown and another change in how people shop.“To mitigate macroeconomic headwinds and best position our business for success, we have made changes to streamline our organizational structure,” Meghan Biango, a spokesperson for Saks Off 5th, said in a statement. “As part of this, we made the difficult decision to part ways with associates across various areas of the business.” The layoffs affected divisions such as talent acquisition and supply chain.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Walmart: The retail giant is significantly raising its starting wages for store workers, as it battles to recruit and retain workers in a tight retail labor market.Tech Layoffs: The industry’s recent job cuts have been an awakening for a generation of workers who have never experienced a cyclical crash.Infrastructure Money: Government spending on initiatives intended to combat climate change and rebuild infrastructure are expected to land this year. The effects on the labor market will be deep but hard to measure.Restaurant Workers: Mandatory $15 food-safety classes are turning cooks, waiters and bartenders into unwitting funders of a lobbying campaign against minimum wage increases.Not all retailers are in a defensive crouch. For instance, Walmart announced this week that it was raising the minimum wage for its store employees in a bid to attract and retain workers in a tight labor market.Still, some retailers are becoming focused less on bringing in new customers — an expensive undertaking — and more on retaining those they gained during the pandemic.“There’s a sense of conservatism,” said Brian Walker, chief strategy officer at Bloomreach, which works with retailers on their e-commerce and digital marketing businesses. “They’re still adjusting in many ways to this omnichannel retail environment and are probably seeing this as an important time to calibrate their organizations and make sure they have the right people, and not too many of them to be pragmatic and weather a potential storm.”That means fewer projects that require lots of money and time and more investments where a company can start seeing results quickly, Mr. Walker said.Ms. Lepard agreed. “This isn’t the economy to really get creative and take on high risk,” she said. “There might be a pulling back of some of that innovation in future investment to make sure they’re pacing themselves.”It’s also a moment for retailers to assess what e-commerce abilities they need. In the early months of the pandemic, online sales exploded as many brick-and-mortar stores went dark. That growth has slowed. E-commerce traffic in North America declined 1.6 percent in the third quarter of 2022 compared with a year earlier, according to Bloomreach’s Commerce Pulse data. Conversion rates — the measure of someone’s buying an item after seeing it advertised — dropped 12 percent during the same period.“This is where people overshot the runway,” said Craig Johnson, president of the retail advisory firm Customer Growth Partners, who has tracked the industry for 25 years. “This works like a ratchet. It might go up to 27 percent, but that’s going to normalize,” he added, referring to the share of total e-commerce spending for the first year of the pandemic, when many stores were grappling with Covid restrictions and closures.When online spending was rising, many companies pushed to fill roles that could help them meet the demand. Now they have to adjust to a new reality.“Unfortunately, along the way, we overcomplicated things, lost sight of some of our fundamentals and simply grew too big,” Niraj Shah, Wayfair’s chief executive, said in a note to employees last Friday. His company, which reported in November that its net revenue was down 9 percent from a year earlier, is looking to save $1.4 billion.Demand for luxury goods is still there, but those retailers say they need to restructure to continue to innovate.Mathias Wasik for The New York TimesIn the luxury sector, the shopper demand is still there, but a restructuring is needed to continue to innovate. As part of its layoffs, Saks.com also separated its technology and operations teams.“We are at a point in our trajectory as a digital luxury pure-play where we need to optimize our business to ensure we are best positioned for the future,” Nicole Schoenberg, a Saks spokeswoman, said in a statement. “These changes are never easy, but they are necessary for our go-forward success.”While reducing head count might help save costs in the short term, retailers will have trouble in the future if they do not also address how to improve the customer experience online, said Liza Amlani, founder of Retail Strategy Group, which works with brands on their merchandising and planning strategies.“With Wayfair, and as with many digital players, what we’ve seen in the last three years is that they scaled and grew too quickly,” Ms. Amlani said. “They banked on an influx of spending across digital. They didn’t invest where they needed to invest.”The retail layoffs are an about-face from 2021, when companies couldn’t hire frontline workers fast enough. After the initial jolt of the pandemic, which led many retailers to furlough or outright fire workers, many people received stimulus checks from the government. They wanted to spend that money, and when companies needed to ramp up in-store services again, they often struggled to find enough workers.Recalling that difficulty might give some retailers pause before they lay off workers this time, Mr. Walker said. If a steep downturn never comes, or if there’s a sudden rebound in demand, companies don’t want to be stuck without enough employees.But the next few months could be rough for retailers, as profit margins shrink and revenue growth slows from what it was the past couple of years. In that kind of environment, investors generally like to see large companies take steps to cut costs. And once layoffs begin, a kind of industry groupthink can set in.“Once a couple of companies start to do it,” said Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School who researches management and human resources, “then it creates some momentum where then you’ve got to explain why you’re not doing what everybody else is doing.” More

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    Even a Soft Landing for the Economy May Be Uneven

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    Small businesses and lower-income families could feel pinched in the months ahead whether or not a recession is avoided this year.One of the defining economic stories of the past year was the complex debate over whether the U.S. economy was going into a recession or merely descending, with some altitude sickness, from a peak in growth after pandemic lows.This year, those questions and contentions are likely to continue. The Federal Reserve has been steeply increasing borrowing costs for consumers and businesses in a bid to curb spending and slow down inflation, with the effects still making their way through the veins of commercial activity and household budgeting. So most banks and large credit agencies expect a recession in 2023.At the same time, a budding crop of economists and major market investors see a firm chance that the economy will avoid a recession, or scrape by with a brief stall in growth, as cooled consumer spending and the easing of pandemic-era disruptions help inflation gingerly trend toward more tolerable levels — a hopeful outcome widely called a soft landing.“The possibility of getting a soft landing is greater than the market believes,” said Jason Draho, an economist and the head of Americas asset allocation for UBS Global Wealth Management. “Inflation has now come down faster than some recently expected, and the labor market has held up better than expected.”What seems most likely is that even if a soft landing is achieved, it will be smoother for some households and businesses and rockier for others.In late 2020 and early 2021, talk of a “K-shaped recovery” took root, inspired by the early pandemic economy’s split between secure remote workers — whose savings, house prices and portfolios surged — and the millions more navigating hazardous or tenuous in-person jobs or depending on a large-yet-porous unemployment aid system.Jerome H. Powell, the Fed chair, said: “I wish there were a completely painless way to restore price stability. There isn’t. And this is the best we can do.”Haiyun Jiang/The New York TimesIn 2023, if there’s a soft landing, it could be K-shaped, too. The downside is likely to be felt most by cash-starved small businesses and by workers no longer buoyed by the savings and labor bargaining power they built up during the pandemic.In any case, more turbulence lies ahead as fairly low unemployment, high inflation and shaky growth continue to queasily coexist.Generally healthy corporate balance sheets and consumer credit could be bulwarks against the forces of volatile prices, global instability and the withdrawal of emergency-era federal aid. Chief executives of companies that cater to financially sound middle-class and affluent households remain confident in their outlook. Al Kelly, the chief executive of Visa, the credit card company, said recently that “we are seeing nothing but stability.”The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Retirees: About 3.5 million people are missing from the U.S. labor force. A large number of them, roughly two million, have simply retired.Switching Jobs: A hallmark of the pandemic era has been the surge in employee turnover. The wave of job-switching may be taking a toll on productivity.Delivery Workers: Food app services are warning that a proposed wage increase for New York City workers could mean higher delivery costs.A Self-Fulfilling Prophecy?: Employees seeking wage increases to cover their costs of living amid rising prices could set off a cycle in which fast inflation today begets fast inflation tomorrow.But the Fed’s projections indicate that 1.6 million people could lose jobs by late this year — and that the unemployment rate will rise at a magnitude that in recent history has always been accompanied by a recession.“There will be some softening in labor market conditions,” Jerome H. Powell, the Fed chair, said at his most recent news conference, explaining the rationale for the central bank’s recent persistence in raising rates. “And I wish there were a completely painless way to restore price stability. There isn’t. And this is the best we can do.”Will the bottom 50 percent backslide?Over the past two years, researchers have frequently noted that, on average, lower-wage workers have reaped the greatest pay gains, with bumps in compensation that often outpaced inflation, especially for those who switched jobs. But those gains are relative and were often upticks from low baselines.Consumer spending accounts for roughly 70 percent of economic activity.Jim Wilson/The New York TimesAccording to the Realtime Inequality tracker, created by economists at the University of California, Berkeley, inflation-adjusted disposable income for the bottom 50 percent of working-age adults grew 4.2 percent from January 2019 to September 2022. Among the top 50 percent, income lagged behind inflation. But that comparison leaves out the context that the average income for the bottom 50 percent in 2022 was $25,500 — roughly a $13 hourly pay rate.“As we look ahead, I think it is entirely possible that the households and the people we usually worry about at the bottom of the income distribution are going to run into some kind of combination of job loss and softer wage gains, right as whatever savings they had from the pandemic gets depleted,” said Karen Dynan, a former chief economist at the Treasury Department and a professor at Harvard University. “And it’s going to be tough on them.”Consumer spending accounts for roughly 70 percent of economic activity. The widespread resilience of overall consumption in the past year despite high inflation and sour business sentiment was largely attributed to the savings that households of all kinds accumulated during the pandemic: a $2.3 trillion gumbo of government aid, reduced spending on in-person services, windfalls from mortgage refinancing and cashed-out stock gains.What’s left of those stockpiles is concentrated among wealthier households.After spiking during the pandemic, the overall rate of saving among Americans has quickly plunged amid inflation.The personal saving rate — a monthly measure of the percentage of after-tax income that households save overall — has dropped precipitously in recent months. 

    Note: The personal saving rate is also referred to as “personal saving as a percentage of disposable personal income.” Personal saving is defined as overall income minus spending and taxes paid.Source: U.S. Bureau of Economic AnalysisBy The New York TimesMost major U.S. banks have reported that checking balances are above prepandemic levels across all income groups. Yet the cost of living is higher than it was in 2019 throughout the country. And depleted savings among the bottom third of earners could continue to ebb while rent and everyday prices still rise, albeit more slowly.Most key economic measures are reported in “real” terms, subtracting inflation from changes in individual income (real wage growth) and total output (real gross domestic product, or G.D.P.). If government calculations of inflation continue to abate as quickly as markets expect, inflation-adjusted numbers could become more positive, making the decelerating economy sound healthier.That wonky dynamic could form a deep tension between resilient-looking official data and the sentiment of consumers who may again find themselves with little financial cushion.Does small business risk falling behind?Another potential factor for a K-shaped landing could be the growing pressure on small businesses, which have less wiggle room than bigger companies in managing costs. Small employers are also more likely to be affected by the tightening of credit as lenders become far pickier and pricier than just a year ago.In a December survey of 3,252 small-business owners by Alignable, a Boston-based small business network with seven million members, 38 percent said they had only one month or less of cash reserves, up 12 percentage points from a year earlier. Many landlords who were lenient about payments at the height of the pandemic have stiffened, asking for back rent in addition to raising current rents.Many landlords who were lenient about payments at the height of the pandemic have stiffened, asking for back rent in addition to raising current rents.Gabby Jones for The New York TimesUnlike many large-scale employers that have locked in cheap long-term funding by selling corporate bonds, small businesses tend to fund their operations and payrolls with a mix of cash on hand, business credit cards and loans from commercial banks. Higher interest rates have made the latter two funding sources far more expensive — spelling trouble for companies that may need a fresh line of credit in the coming months. And incoming cash flows depend on sales remaining strong, a deep uncertainty for most.A Bank of America survey of small-business owners in November found that “more than half of respondents expect a recession in 2023 and plan to reduce spending accordingly.” For a number of entrepreneurs, decisions to maintain profitability may lead to reductions in staff.Some businesses wrestling with labor shortages, increased costs and a tapering off in customers have already decided to close.Susan Dayton, a co-owner of Hamilton Street Cafe in Albany, N.Y., closed her business in the fall once she felt the rising costs of key ingredients and staff turnover were no longer sustainable.She said the labor shortage for small shops like hers could not be solved by simply offering more pay. “What I have found is that offering people more money just means you’re paying more for the same people,” Ms. Dayton said.That tension among profitability, staffing and customer growth will be especially stark for smaller businesses. But it exists in corporate America, too. Some industry analysts say company earnings, which ripped higher for two years, could weaken but not plunge, with input costs leveling off, while businesses manage to keep prices elevated even if sales slow.That could limit the bulk of layoffs to less-valued workers during corporate downsizing and to certain sectors that are sensitive to interest rates, like real estate or tech — creating another potential route for a soft, if unequal, landing.The biggest challenge to overcome is that the income of one person or business is the spending of another. Those who feel that inflation can be tamed without a collapse in the labor market hope that spending slows just enough to cool off price increases, but not so much that it leads employers to lay off workers — who could pull back further on spending, setting off a vicious circle.Those who feel that inflation can be tamed without a collapse in the labor market hope that spending slows just enough to cool off price increases.Jim Wilson/The New York TimesWhat are the chances of a soft landing?If the strained U.S. economy is going to unwind rather than unravel, it will need multiple double-edged realities to be favorably resolved.For instance, many retail industry analysts think the holiday season may have been the last hurrah for the pandemic-era burst in purchases of goods. Some consumers may be sated from recent spending, while others become more selective in their purchases, balking at higher prices.That could sharply reduce companies’ “pricing power” and slow inflation associated with goods. Service-oriented businesses may be somewhat affected, too. But the same phenomenon could lead to layoffs, as slowdowns in demand reduce staffing needs.In the coming months, the U.S. economy will be influenced in part by geopolitics in Europe and the coronavirus in China. Volatile shifts in what some researchers call “systemically significant prices,” like those for gas, utilities and food, could materialize. People preparing for a downturn by cutting back on investments or spending could, in turn, create one. And it is not clear how far the Fed will go in raising interest rates.Then again, those risk factors could end up relatively benign.“It’s 50-50, but I have to take a side, right? So I take the side of no recession,” said Mark Zandi, the chief economist at Moody’s Analytics. “I can make the case on either side of this pretty easily, but I think with a little bit of luck and some tough policymaking, we can make our way through.” More

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    Labor Market Strength Persisted Heading Into the Holidays

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    Government data from November showed job openings remained high, with rates of quitting and layoffs holding steady.The labor market remained a key source of strength for households and the overall economy ahead of the holiday season, even as hiring struggles remained a headache for employers, the latest government data indicates.The Bureau of Labor Statistics reported Wednesday that there were 10.5 million U.S. job openings on the last day of November, a figure little changed from the month before. The number of workers voluntarily quitting their jobs ticked up slightly, and layoffs were comparable to the previous month.According to the bureau’s Job Openings and Labor Turnover Survey, or JOLTS, there were 1.7 open jobs for every unemployed worker near the end of 2022. Some experts caution that the vacancy rate should be taken with a grain of salt, since many employers may no longer be urgently recruiting, yet don’t see the harm in leaving a job listing posted online in case the right candidate comes along.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Retirees: About 3.5 million people are missing from the U.S. labor force. A large number of them, roughly two million, have simply retired.Switching Jobs: A hallmark of the pandemic era has been the surge in employee turnover. The wave of job-switching may be taking a toll on productivity.Delivery Workers: Food app services are warning that a proposed wage increase for New York City workers could mean higher delivery costs.A Self-Fulfilling Prophecy?: Employees seeking wage increases to cover their costs of living amid rising prices could set off a cycle in which fast inflation today begets fast inflation tomorrow.The JOLTS release is what economists call a lagging indicator, telling more about recent conditions in the business cycle rather than about what might come next. Most economists expect layoffs to increase and the economy to slouch, with fewer job postings. But the persistence of vacancies in November underlines commentary from small businesses leaders and Fortune 500 chief executives alike, lamenting a dearth of talent to fill openings.“The people shortage is systemic, and it’s fundamentally changing how businesses should prepare for economic slowdowns,” argued Ron Hetrick, a senior economist at Lightcast, a labor market analytics firm. “If the U.S. does see some sort of recession in 2023, it will be less about persistent worker displacement and more about employers finally being able to fill the roles they’ve had open for the past several years.”Baby boomers are retiring. And with political gridlock set to pick up in Washington, some federal legislative proposals intended to expand the labor pool — like immigration reform or an expansion of child care support — are unlikely to become law anytime soon.As inflation from sources like supply chain snags has cooled, policymakers and influential economic commentators have dedicated a larger share of their discussions to concerns about a labor market that in their view is “overheated,” or too strong for the overall good.In his most recent news conference, Jerome H. Powell, the chair of the Federal Reserve, emphasized that the central bank was focused on bringing all dimensions of the economy, including the job market, into “better alignment” in an effort to slow price increases.“We do see a very, very strong labor market, one where we haven’t seen much softening, where job growth is very high, where wages are very high, vacancies are quite elevated and, really, there’s an imbalance in the labor market between supply and demand,” he said. “So that part of it, which is the biggest part, is likely to take a substantial period to get down.”For roughly two years, millions of workers gained an unfamiliar degree of leverage as their talent became more valued or scarce, and they began quitting or bargaining for higher wages in greater numbers. That trend has been a lingering source of anxiety for a variety of business owners, who have had to contend with inflation, much like their customers, while balancing higher labor costs with their profit goals.In November, the rate of workers voluntarily quitting jumped notably for establishments with fewer than 10 employees, potentially further evidence of how small-scale entrepreneurs are struggling to compete with bigger businesses to attract talent. More

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    Google Employees Brace for a Cost-Cutting Drive as Anxiety Mounts

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    The tech giant has so far taken steps to streamline without mass layoffs, but employees are girding for deeper cuts.Google workers in Switzerland sent a letter this month to the company’s vice president of human resources, outlining their worries that a new employee evaluation system could be used to cull the work force.“The number and spread of reports that reached us indicates that at least some managers were aggressively pressured to apply a quota” on a process that could lead to employees getting negative ratings and potentially losing their jobs, five workers and employee representatives wrote in the letter, which was obtained by The New York Times.The letter signaled how some Google employees are increasingly interpreting recent management decisions as warnings that the company may be angling to conduct broader layoffs. From the impending closure of a small office and the cancellation of a content-moderation project to various efforts to ease budgets during 2023 planning meetings, the Silicon Valley behemoth has become a tinderbox of anxiety, according to interviews with 14 current and former employees, who spoke on the condition of anonymity for fear of retribution.In some cases, Google employees have reacted to a program that the company began in July to simplify operations, cut red tape and make itself more productive. In other instances, they have had budget conversations, with some teams unable to hire more next year, the people said. And workers have also fretted over decisions made months ago that, to some, have taken on new meaning, they said.The worries have grown as Google’s tech industry peers have handed out pink slips amid a souring global economy. Last month, Meta, the owner of Facebook and Instagram, purged its ranks by 11,000, or about 13 percent of its work force. Amazon also began laying off about 10,000 people in corporate and technology jobs, or about 3 percent of its corporate employees.Even Google, which is on track to make tens of billions of dollars in profits this year, has had to come to terms with a slowdown. In October, as the digital advertising market slumped, Google’s parent company, Alphabet, reported that profit dropped 27 percent in the third quarter from a year earlier, to $13.9 billion.Google did not comment on employee anxiety in a response to a request from The Times. Sundar Pichai, the chief executive, said in October that the company would “focus on a clear set of product and business priorities.” He also said it would slow hiring and “moderate” the growth of its expenses.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Delivery Workers: Food app services are warning that a proposed wage increase for delivery workers in New York City could mean higher delivery costs.A Self-Fulfilling Prophecy?: Employees seeking wage increases to cover their costs of living amid rising prices could set off a cycle in which fast inflation today begets fast inflation tomorrow.Disabled Workers: With Covid prompting more employers to consider remote arrangements, employment has soared among adults with disabilities.A Feast or Famine Career: America’s port truck drivers are a nearly-invisible yet crucial part of the global supply chain. And they are sinking into desperation.Unlike other big tech companies, Google has so far avoided large-scale job cuts. Still, investors have pushed the company to become more aggressive about “defending” its huge profits, said Mark Mahaney, an analyst at Evercore ISI.“One of the most obvious ways to do that is to cut costs and reduce your employee head count,” he said. He added that it was “kind of odd” that Google’s parent had hired 30,000 employees in the last three quarters, given the economic trends. At the end of September, Alphabet had 186,779 workers.In recent months, Google has appeared to pay more attention to costs. In July, it started the program to streamline operations. Soon after, it canceled some projects, including the Pixelbook laptop and Stadia, its streaming platform for video games. It has also reduced funding for Area 120, an in-house product incubator.At one recent meeting, a Google human resources representative told a worker that the company would revisit the possibility of broader layoffs in the new year, and that it was a decision for Mr. Pichai, according to an audio recording obtained by The Times.Google has told other employees that it would put a priority on trimming real estate expenditures, travel costs and perks before it pursued layoffs, said a person familiar with the conversations, who spoke on the condition of anonymity because the conversations were private. The company plans to close a small office in Farmington Hills, Mich., a suburb of Detroit, next month.Google said in October that it would slow hiring and “moderate” the growth of its expenses.Jason Henry for The New York TimesProject cancellations and reorganizations have stoked nervousness. In September, Google’s YouTube shut down a project based in the Farmington Hills office with nearly 80 workers, laying off some staff members who did not find new roles at the company, four people familiar with the decision said. YouTube had hired them as contract workers to moderate content on the video platform. Google said 14 workers had lost their jobs..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}What we consider before using anonymous sources. Do the sources know the information? What’s their motivation for telling us? Have they proved reliable in the past? Can we corroborate the information? Even with these questions satisfied, The Times uses anonymous sources as a last resort. The reporter and at least one editor know the identity of the source.Learn more about our process.Google said that through these types of reorganizations, it was not looking to reduce the size of its overall work force, but that some teams might eliminate roles as the company reassessed its priorities.Some teams that consistently grew in the past will be unable to hire more people next year, four people familiar with the situation said. There are also higher demands for 2023 planning, such as a manager’s being asked to draft plans on how to handle 10 different budget scenarios instead of three or four, one person said. In planning discussions, leaders have pressed managers to justify their expenses, asking if there are workarounds or team reorganizations that could save money, two people said.One of the biggest concerns for some employees has been whether Google could use its new performance-evaluation system to accelerate job cuts. In May, the company installed the new system, called Googler Reviews and Development.Under the system, managers expect the bottom 2 percent of employees to be categorized as having “not enough impact,” according to two people familiar with the matter. Another 4 percent should be judged as providing “moderate impact.”Concerns have intensified that the bottom 6 percent, or roughly 11,000 people, could be targeted for dismissal, according to four people, and as earlier reported by the tech news site The Information.The GRAD system means Google now has two categories for employees who are considered low performing, compared with one under the old program, potentially leading to a bigger pool of workers at the bottom. The system has also had a bumpy rollout, with managers and employees confused about how it should work, according to the letter and four employees.Google said it expected workers would become more comfortable with the system over time. It added that it had a no-surprises policy, meaning employees would know well in advance if their performance was falling short.Before handing out the two lowest ratings, managers are also supposed to notify employees in “support check-in” meetings. Google said not every such meeting would lead to a lower rating, with support check-ins also held for those who need extra help to meet their obligations.Employees would also have indications if their manager wanted to put them on a “performance improvement” plan, the company said, a process that compels workers to improve their work within 60 days to keep their jobs. Google has given workers the choice of staying on a performance-improvement plan or resigning with a buyout package.Google said that it had not made changes to increase the number of performance plans, and that it had offered these types of severance options for years.This month’s letter from some of Google’s workers in Switzerland to Fiona Cicconi, the vice president of human resources, was led by members of a 15-person employee representation committee, ER-CH.One of their primary concerns was that contrary to what some Google executives have said, the company may have a quota for the number of employees who were supposed to have support check-ins, and whose jobs might therefore be vulnerable.Google said it had not imposed a quota on support check-ins. But when almost no one used these meetings after the GRAD system was put in place, it said, it asked leaders to convey the importance of the meetings to managers.The memo signatories in Switzerland also said there was confusion, among managers and workers alike, about who qualified for a support check-in. They urged Ms. Cicconi to put guardrails in place so that the system did not lead to mass firings.“It’s normal that new processes don’t run smoothly in the beginning, but this should not happen at the expense of Googlers’ well-being, careers and compensation,” they wrote. More

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    Computer Science Students Face a Shrinking Big Tech Job Market

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    A new reality is setting in for students and recent graduates who spent years honing themselves for careers at the largest tech companies.Ever since she was a 10th grader in Seattle, Annalice Ni wanted to develop software for a prominent tech company like Google. So she went to great lengths to meet the internship and other résumé criteria that make students attractive hires to the biggest tech firms.In high school, Ms. Ni took computer science courses, interned at Microsoft and volunteered as a coding teacher for younger students. She majored in computer science at the University of Washington, earning coveted software engineering internships at Facebook. After graduating from college this year, she moved to Silicon Valley to start her dream job as a software engineer at Meta, Facebook’s parent company.Then last month, Meta laid off more than 11,000 employees — including Ms. Ni.“I did feel very frustrated and disappointed and maybe a bit scared because all of a sudden, I didn’t know what to do,” Ms. Ni, 22, said of her unexpected career setback. “There’s not much I could have done, especially in college, more than I already did, better than I already did.”Over the last decade, the prospect of six-figure starting salaries, perks like free food and the chance to work on apps used by billions led young people to stampede toward computer science — the study of computer programming and processes like algorithms — on college campuses across the United States. The number of undergraduates majoring in the subject more than tripled from 2011 to 2021, to nearly 136,000 students, according to the Computing Research Association, which tracks computing degrees at about 200 universities.Ms. Ni spends her days interviewing for jobs and brushing up on her skills.Jason Henry for The New York TimesTech giants like Facebook, Google and Microsoft encouraged the computing education boom, promoting software jobs to students as a route to lucrative careers and the power to change the world.But now, layoffs, hiring freezes and planned recruiting slowdowns at Meta, Twitter, Alphabet, Amazon, DoorDash, Lyft, Snap and Stripe are sending shock waves through a generation of computer and data science students who spent years honing themselves for careers at the largest tech companies. Tech executives have blamed a faltering global economy for the jobs slowdown.The cutbacks have not only sent recent graduates scrambling to find new jobs but also created uncertainty for college students seeking high-paying summer internships at large consumer tech companies.In the past, tech companies used their internship programs to recruit promising job candidates, extending offers to many students to return as full-time employees after graduation. But this year, those opportunities are shrinking.Amazon, for instance, hired about 18,000 interns this year, paying some computer science students nearly $30,000 for the summer, not including housing stipends. The company is now considering reducing the number of interns for 2023 by more than half, said a person with knowledge of the program who was not authorized to speak publicly.More on Big TechMicrosoft: The company’s $69 billion deal for Activision Blizzard, which rests on winning the approval by 16 governments, has become a test for whether tech giants can buy companies amid a backlash.Apple: Apple’s largest iPhone factory, in the city of Zhengzhou, China, is dealing with a shortage of workers. Now, that plant is getting help from an unlikely source: the Chinese government.Amazon: The company appears set to lay off approximately 10,000 people in corporate and technology jobs, in what would be the largest cuts in the company’s history.Meta: The parent of Facebook said it was laying off more than 11,000 people, or about 13 percent of its work forceBrad Glasser, an Amazon spokesman, said the company was committed to its internship program and the real-word experience that it provided. A Meta spokeswoman referred to a letter to employees from Mark Zuckerberg, the company’s chief executive, announcing the company’s layoffs last month.Hiring plans are also changing at smaller tech firms. Roblox, the popular game platform, said it planned to hire 300 interns for next summer — almost twice as many as this year — and was expecting more than 50,000 applications for those spots. Redfin, which employed 38 interns this summer, said it had canceled the program for next year.There are still good jobs for computing students, and the field is growing. Between 2021 and 2031, employment for software developers and testers is expected to grow 25 percent, amounting to more than 411,000 new jobs, according to projections from the Bureau of Labor Statistics. But many of those jobs are in areas like finance and the automotive industry.“Students are still getting multiple job offers,” said Brent Winkelman, chief of staff for the computer science department at the University of Texas at Austin. “They just may not come from Meta, from Twitter or from Amazon. They’re going to come from places like G.M., Toyota or Lockheed.”College career centers have become sounding boards for anxious students on the cusp of entering the tech job market. In career counselors’ offices, the search for a Plan B has heightened.Some students are applying to lesser-known tech companies. Others are seeking tech jobs outside the industry, with retailers like Walmart or with government agencies and nonprofits. Graduate school is also an option.“This particular class has been a lot more savvy than previous classes,” said Hazel Raja, senior director of the career development office at Pomona College in Claremont, Calif. “Even those who have secured job offers, they’re still making sure they’re networking and staying engaged in campus recruiting opportunities.”Helen Dong, 21, a senior majoring in computer science at Carnegie Mellon University, interned at Meta twice, in 2021 and 2022. So she was surprised at the end of this summer, she said, when she did not receive a job offer from the company. Meta’s recent layoffs prompted her to apply for jobs outside tech, at automotive and financial companies. Last month, she posted videos on TikTok advising her peers to adjust their job expectations.Helen Dong, 21, a senior majoring in computing at Carnegie Mellon University, interned at Meta but did not receive a job offer. Now she is looking in the finance and automotive industries.Helen Dong“I chose to major in computer science so that I could get a ton of offers after college and make bank,” Ms. Dong joked in one TikTok, as she sang along to “Reduce Your Expectations to 0.” In this job market, she wrote at the bottom of the video, “be grateful with 1 offer.”In interviews, 10 college students and recent graduates said they were not prepared for a slowdown in jobs at the largest tech companies. Until recently, those companies were fiercely competing to hire computer science majors at top schools — with some students receiving multiple job offers with six-figure starting salaries and five-digit signing bonuses. An entire genre of TikTok videos had sprung up dedicated to young techies extolling their job perks and their annual compensation, with at least one highlighting a $198,000 package, complete with stock options and relocation expenses.Dozens of people who were recently laid off, or whose tech job offers were rescinded, have posted details of their plights on LinkedIn. To alert recruiters, some have added the hashtag #opentowork to their LinkedIn profile photos.Tony Shi, 23, who majored in computer science and business at Western University in London, Ontario, is one of them. After graduating this year, he began working as a product manager at Lyft in August. In November, the ride-hailing company laid off about 650 employees, including Mr. Shi.Now he is on a tight deadline to find a new job. Mr. Shi is Canadian, from Waterloo, Ontario, and obtained a visa to move to San Francisco for his job at Lyft. Under the visa, he has 60 days to find a new job. He said he had become more sensitive to the businesses and balance sheets of potential employers.“I need to be a little more risk-averse. I definitely don’t want to get laid off again,” he said. Instead of his taking a company for its word, he added, “now, the product needs to make a lot of sense.”Meta rescinded its job offer to Rachel Castellino, 22, weeks before she was scheduled to start work.Jason Henry for The New York TimesSome recent graduates did not get the chance to start their new tech jobs.Rachel Castellino, a statistics major at the California Polytechnic State University, worked to land a job at a major tech company. During college, she interned as a project manager at PayPal, received a data science fellowship funded by the National Science Foundation and founded a data science club at her school.Ms. Castellino, 22, knew she would have to grind to pass companies’ technical interviews, which typically involve solving programming problems. Last year, she spent much of the fall job hunting and preparing for coding assessments. For four days a week, from 8 a.m. to 4 p.m., she studied probability concepts and programming languages. Even so, she said, the interview process was brutal.In November 2021, Meta offered her a job as a data scientist, starting in December 2022. Last month, Meta rescinded the offer, she said.“I worked so hard for those interviews. It felt really good to earn something of a high caliber,” she said. “I had so much to look forward to.”The setback has been disheartening. “I was upset,” Ms. Castellino said. “It wasn’t good to hear.”As for Ms. Ni, she now views losing her dream job as an opportunity to broaden her career horizons. Over the last month, she has applied to midsize tech firms and start-ups that she finds innovative — potential employers she had not previously considered.“I’m exploring opportunities that I didn’t before,” Ms. Ni said. “I feel like I’ve already learned some things.”Karen Weise More

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    Are You Applying for Tech Jobs or Internships? We Want to Hear About It.

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    Layoffs and hiring freezes at companies like Amazon and Meta are changing the job market for recent grads and college students. Tell us about your experiences.November was a bleak month for tech workers. Meta, Amazon, Lyft, Stripe and Twitter laid off thousands of employees. Microsoft and Google announced hiring slowdowns.The cutbacks and hiring freezes affected not only veteran employees. Some tech companies laid off recent college graduates or rescinded their job offers. Some firms are also cutting their summer internship programs for college students next year.The industry slowdown is sending shock waves through a generation of computer science and data science students who spent years preparing themselves for careers at the largest tech companies. Many recent grads and college seniors are now seeking tech jobs outside the tech industry, in industries like retail, banking and finance.I’m a technology reporter at The New York Times who investigates the societal impacts of tech innovations and tech company business practices. And I am reporting a story about the implications of the industry jobs slowdown for people in the early stages of their tech careers.If you are a college student or recent grad applying for tech internships or jobs, I’d like to hear from you.We may use your contact information to follow up with you. If we publish your submission, we will not include your name without first contacting you and obtaining your permission.Tell us about your experiences applying for tech jobs and internships More

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    in Economy

    U.S. Job Growth Remains Strong, Defying Fed’s Rate Strategy

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    Employers added 263,000 workers in November, even as some industries showed signs of a slowdown. Wage growth exceeded expectations.America’s jobs engine kept churning in November, the Labor Department reported Friday, a show of continued demand for workers despite the Federal Reserve’s push to curb inflation, largely by tamping down hiring.Employers added 263,000 jobs, even as a wave of layoffs in the tech industry made headlines. That was only a slight drop from the revised figure of 284,000 for October.The unemployment rate was unchanged at 3.7 percent, while wages were 5.1 percent higher than a year earlier, a bigger rise than expected.Those signs of strength perpetuate a strange duality: While a strong labor market may benefit workers in the short term, it could strengthen the Fed’s resolve to raise rates even further, which would increase the likelihood of a recession in 2023.“It upsets some of the narrative going into the report, which was that things are slowing down,” said Neil Dutta, head of U.S. economics at Renaissance Macro. “The reason that this matters for everyone is that the Fed still sees the labor market as the mechanism by which they can solve the inflation problem.”Despite steady employment growth, the impact of higher interest rates is already evident. Hiring in goods-producing sectors like manufacturing and residential construction — which are more sensitive to rising borrowing costs — has slowed substantially, and the number of hours worked fell, mainly because of those industries. But robust hiring in health care and hospitality, where wages have also grown most rapidly, powered continued gains.Wages continue to increase, though still not at the pace of inflationYear-over-year percentage change in earnings vs. inflation More