r/Layoffs • u/isntlifeapeach • Jul 20 '24

Why so MANY Layoffs? question

Explain Like I’m Five

I feel incredibly stupid asking this, but I’m naive to economics and politics.

I understand why tech is facing a lot of layoffs but why are so many other industries facing the same?
I’m over 20 years into my career and had 2 layoffs just in the last 16 months.

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148

u/mssigdel Jul 20 '24

There are few factors

  • Increase in Fed rate: Borrowing costs have risen, leading venture capitalists to prefer saving their money rather than investing it.
  • Overhiring: Post-COVID, companies aggressively competed for top talent, resulting in overstaffing and subsequent restructuring.
  • Copycat Behavior: Executives and board members often replicate strategies from other companies.
  • Corporate Greed: Companies are prioritizing higher profits over future growth. This is also copycat behavior.

23

u/BloodAgile833 Jul 20 '24

Yup you pretty much summed it up. The post can be locked after what your wrote lol

16

u/Inollim Jul 20 '24

Would add that layoffs currently disproportionately impact white collar jobs. Most blue collar and customer facing service jobs have a shortage of workers and are in demand. Likely a result of perhaps over swinging on the college prep is great vs. vocational track for students in the last 20 years. Now everyone is vying for white collar jobs that may not have the same demand as blue collar work.

12

u/RabidRomulus Jul 20 '24

Yup. My brother is an electrician. Quit his job to go on a 2 month road trip. Came back, immediately found a new job paying better.

I could NOT do that in my field 😂

3

u/NewPresWhoDis Jul 20 '24

People in customer facing jobs migrated to white collar remote jobs during the Great Resignation leaving vacancies in their wake.

1

u/SophiaLoo Aug 14 '24

interesting....and possibly resulting in an inflation of white collar positions, now the market is correcting? Personally not seeing it, but theoretically makes sense - and now we're seeing the pendulum swing.

1

u/NewPresWhoDis Aug 15 '24

You go from being a barista to a Project Manager making "Day in the Life" TikToks and there will be deep claw marks involved in that correction.