Jobs and job growth in the U.S. beat expectations, as the unemployment rate fell to 4.1% in December. Reuters says that the labor market “ended the year on solid footing” and called the report from the U.S. Bureau of Labor and Statistics “upbeat”. Nonfarm payrolls increased by 256,000 jobs – which is the highest level since March of last year. Economists had predicted payrolls advancing by 160,000. The U.S. economy grew by 2.32 million jobs in 2024. But, as with any market snapshot, not every part of the picture is positive. Management jobs continue to disappear, and white collar workers have seen shrinkage over the past 12 months. The World Economic Forum says that over 40% of companies worldwide are expecting to reduce their workforces over the next five years, as part of the rising impact of artificial intelligence (AI). Several big-name companies are starting 2025 with announcements of layoffs and job cuts.
Impressive Job Growth, Amidst Layoff Announcements
Big tech companies like Google, IBM, Tesla, TikTok, Snap and Dropbox implemented job cuts in 2024, according to TechCrunch. These layoffs are, in part, result of leveraging new capabilities of AI. Here are some other major players with announcements already underway:
- Mircosoft – an unspecified number of job cuts are being discussed, as the company focuses first on underperforming employees. “When people are not performing,” a spokesperson tells Business Insider, “we take the appropriate action.”
- BlackRock – the investment company plans to cut about 1% of jobs in 2025, so the layoffs apply to about 200 people. The firm added 3,750 employees last year and expects to add 2,000 more based on recent acquisitions, according to Bloomberg.
- Bridgewater – on Monday, the worlds’s largest hedge fund cut 7% of its staff, according to Business Insider. The move returns headcount to 2023 levels.
- The Washington Post – Jeff Bezo’s media company is cutting back, as about 4% of its workforce will be let go according to Reuters reports.
- Ally – the online banking and finance company is laying off about 500 workers, according to The Charlotte Observer. This is the second round of cuts in less than 18 months, company is offering severance packages and employees can apply to other roles within the company.
Inside a robust job report, pockets of layoffs remain – especially in finance and technology-related fields. While AI is part of the reason for the job cuts, opportunities in AI remain (for workers with the right skills). Notice that job gains were concentrated in non-cyclical industries, such as healthcare, which added 46,000 jobs. The retail and leisure/hospitality sectors added 43,000 jobs, respectively, last month. While overall job growth remains strong, the strength of opportunity depends on industry. For knowledge workers in tech and finance, the job growth picture is changing for 2025.
Read the full article here
