by Wolf Richter, Wolf Street:
In tech & social media, the labor market got shot. In the rest of the economy, it remains very tight.
The announcements of global layoffs by tech and social media companies and by startups make all the news. But these are announcements, not actual layoffs, and they’re global, with only part of them in the US. Tech and social media are a relatively small part of the US economy, while companies in much larger other sectors are trying to hire. Boeing, which added 14,000 employees in 2022, said it wants to hire an additional 10,000 people in 2023, most of them in its business units, engineering, and manufacturing. Chipotle said it will hire 15,000 people in 2023. Other companies are trying to hire as well, in a labor market that remains tight.
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But job openings in the “Information” sector collapsed by half in December, the biggest drop since the Dotcom Bust. The sector includes web search portals, data processing, data transmission, Information services, software publishing, motion picture and sound recording, broadcasting including over the Internet, and telecommunications. Many tech and social media companies are categorized in it (others are in the “Professional and Business Services” sector, that we’ll get to in a moment).
In Information, job openings collapsed to 109,000 in December from 204,000 in November and 229,000 in October, according to today’s Job Openings and Labor Turnover Survey (JOLTS) by the Bureau of Labor Statistics. That brought job openings back down to the middle of the pre-pandemic range.
It’s in the relatively small tech and social media space — some of which is in the “Information category” — where companies, drunk with Easy Money, were hogging workers and office space for a future that did not come, and now they’re unwinding some of this, which I discussed: What’s Behind the Tech & Social Media Layoffs?
Job openings overall jumped by 572,000 in December, to just over 11 million openings, seasonally adjusted, a number not seen since July last year. Not seasonally adjusted, job openings jumped by 230,000.
Job openings were up by 64% from December 2019, and remain solidly in the astronomical zone, indicating an overall labor market that remains very tight – amid massive hiring binges in some sectors that we’ll get to in a moment.
This data is not based on online job postings, but on surveys of 21,000 businesses and what they said about the job openings they actually have, the number of people they actually hired, the number of people they laid off, the number of people who quit, etc.
Actual layoffs & discharges – not announcements – rose by 50,000 in December, to 1.48 million, which remains historically low, down 24% from December 2019 and down 18% from the four-year average of 2016 through 2019 (1.8 million).
Every day, lots of companies lay off or fire people for a variety of reasons. This is part of the regular churn as employers tweak their operations. Those layoffs and discharges have ticked up from the record lows a year ago, but remain near record lows, indicating that overall – despite the job shedding in Information – companies are still clinging to their workers, after having had so much trouble hiring them:
