As economy cools, scattered layoffs put an end to dream jobs for some workers

As economy cools, scattered layoffs put an end to dream jobs for some workers

4:40pm Jul 06, 2022
Group of young adults, photographed from above, on various painted tarmac surface, at sunrise.
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After a period of incredible job growth, many economists are calling it a cooling off.

It started last winter — in February — with Peloton. The home fitness company whose stock price more than quadrupled in the pandemic, announced it was cutting 2,800 jobs.

Since then, there have been more layoff announcements from other high-flyers such as Coinbase, Netflix, Tesla and more.

"I think a helpful way to think about what is happening in the labor market right now is that we're seeing some of that frothiness abate," says AnnElizabeth Konkel, an economist with the Indeed Hiring Lab.

It's little consolation for the worker whose job is lost.

A new job opened the door to the corporate world

Last October, a week before Tanisha Bates started a new job, she decided to spruce up her home office. She tore out the carpet and put in new floors, painted the walls, and even set up a coffee bar.

"I'm going to be working from home, so I need it to be my happy, my Zen zone," Bates recalls thinking at the time.

She'd worked a couple of administrative jobs in schools and before that, in retail. But she'd had her eye on the corporate world where she knew the money would be better and the work more fulfilling.

Sure enough, in 2021, a great opportunity surfaced with Stitch Fix. The online personal styling company was looking for recruiting coordinators to diversify its team of stylists.

The job was everything she'd hoped for. She got to work on an initiative she believed in — helping Stitch Fix to build a more diverse workforce. Also, the pay was great, and she could work from home.

"I felt like I finally had this perfect work-life balance," says Bates.

Layoffs came suddenly but were not entirely a surprise

It all came to abrupt end on June 9. Bates was among the 330 people Stitch Fix laid off, citing a drop in membership and an uncertain economic environment.

It wasn't entirely a surprise. A few months earlier, Stitch Fix's leadership had told its employees that things weren't going so well. Bates had taken note of the the layoffs happening at Peloton and elsewhere.

"I knew it had to happen," says Bates. "It just felt super defeating."

Konkel points out that while job postings in fields such as human resources and software development are down in recent months, they remain elevated, well above where they were before the pandemic.

"My hope is that for these individuals who have been laid off... hopefully they can capitalize on the strength of the labor market," says Konkel.

There were 11.3 million job openings in the U.S. at the end of May, according to the Labor Department, down from a record high set in March of 11.9 million.

A recent grad sees job rescinded before he even starts

In Chicago, Andrés Crucetta is hoping the strong labor market proves fruitful, again.

Crucetta had just finished up his master's degree in computer science and public policy in Chicago and was about to head out to San Francisco for a job with a tech startup when he got an email from the head of engineering.

Crucetta read the word "update" and knew immediately something was up.

"It's almost like when you get a text for a breakup and you're like, 'Oh, here we go. She wants to go for a walk,'" he says.

It had only been about a month since Crucetta had accepted the job. But in this economy, things change quickly. Five days before he was to start, he was informed that the company had implemented a hiring freeze.

He cried for a little bit and then got to work undoing his plans. He had an airplane ticket and a sublease in San Francisco that needed to be canceled. He had to quickly find temporary housing in Chicago while he resumed his job search.

As an international student from Venezuela, Crucetta has 90 days from graduation to figure something out.

"I'm very hopeful," he says. "I think it's just a matter of going through the process again."

Searching for a job feels different in summer 2022

Bates, who is also back on the job hunt, says things feel different from last fall. Hiring managers seem less engaged. Finding talent seems to be on the backburner, she says.

She has put in more than 70 job applications and thinks she may have to start considering in-person positions, leaving her beloved home office and that perfect work-life balance behind.

"Remote jobs are so competitive, because everybody from across the U.S. is applying. It's like going up against the masses," she says.

Copyright 2022 NPR. To see more, visit https://www.npr.org.

Transcript

LEILA FADEL, HOST:

It seemed to start in February with Peloton. Twenty percent of the corporate workforce was let go. In recent weeks, a similar scene has played out at other companies, like Carvana, Coinbase, Netflix and Tesla. Some call it a cooling off. But for workers, it's a signal that there may be tough times ahead. NPR's Andrea Hsu has more.

ANDREA HSU, BYLINE: Last October, a week before Tanisha Bates (ph) started a new job, she decided to spruce up her home office. She tore up the carpet and put in new floors, painted the walls, even set up a coffee bar.

TANISHA BATES: I was like, you know what? I'm going to be working from home, so I needed to be, like, my happy, my Zen zone.

HSU: Bates had worked a couple administrative jobs in schools and before that in retail. But she'd had her eye on the corporate world. She was pretty sure the money would be better and the work more fulfilling. Sure enough, last year, a great opportunity surfaced with the online personal styling company Stitch Fix. They were looking for recruiting coordinators, people who could help the company diversify its team of stylists.

BATES: And I was like, oh, my gosh. I definitely want to do this. Like, this is it. This is my breakthrough into the corporate world.

HSU: The job was everything she'd hoped for. And the pay was great. And she could work from home.

BATES: I felt like I finally had, like, this perfect work-life balance.

HSU: And then it all came to an abrupt end a month ago, when she was laid off. It wasn't entirely a surprise. A few months earlier, Stitch Fix's leadership had said things weren't going so well. The company was losing members. It scaled back its compensation package for new hires.

BATES: And I was like, well, that doesn't look too good.

HSU: Then on June 9, Stitch Fix laid off 15% of its salaried workforce, 330 people. It's part of a scattering of layoffs in high growth areas like tech and crypto. But AnnElizabeth Konkel, an economist with the job site indeed.com, is quick to point out that layoffs overall are low. And the job market is still strong. Job postings in some fields, like HR and software development, are down.

ANNELIZABETH KONKEL: But they remain quite high above their pre-pandemic baseline.

HSU: Remember, in the pandemic, some employers went crazy trying to hire to meet demand.

KONKEL: And so I think a helpful way to think about what is happening in the labor market right now is that we're seeing some of that frothiness abate.

HSU: As companies return to more normal levels of staffing. Still, losing a job never feels normal, especially when it happens before you've even started. Just ask Andres Crucetta (ph). He had just finished up his master's degree in Chicago and was about to head out to San Francisco for a job with a tech startup when he got an ominous email. It was from the head of engineering with the subject line update. Crucetta knew immediately something was up.

ANDRES CRUCETTA: It's almost like when you get a text for a breakup. And you're like, oh, here we go. She wants to go for a walk (laughter).

HSU: It had only been a month since Crucetta had accepted the job. But in this economy, things change fast. Five days before he was to start, he was informed that the company had implemented a hiring freeze. He says he cried for a little bit and then got to work undoing his plans.

CRUCETTA: I had a air ticket that I needed to cancel, cancel the sublease. I had to figure out where I could stay in Chicago for a few weeks.

HSU: And he's now back interviewing for jobs. He does have a deadline. As an international student, he has 90 days from graduation to find something.

CRUCETTA: I'm very hopeful. I think it's just a matter of going through the process again.

HSU: Tanisha Bates is also interviewing for jobs. It feels different from last fall, she says. Hiring managers seem less engaged. It's like finding talent has been backburnered for now. She's thinking she may have to start considering in-person positions.

BATES: Remote jobs are so competitive because everybody from across the U.S. is applying. It's like going up against the masses.

HSU: So far, she's applied for 70-some jobs and holding out hope that something good comes through.

Andrea Hsu, NPR News. Transcript provided by NPR, Copyright NPR.

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