Survey shows half of US companies are preparing to cut jobs

Businesses across the country are planning to downsize their staff after a hectic year of hiring.

That’s according to a new survey published Thursday by consultant PricewaterhouseCoopers, which last month included more than 700 US CEOs and board members from various industries. About half of respondents said they were preparing to reduce staffing – or had already done so – while 52% had implemented a hiring freeze.

Moreover, nearly 46% of companies are either dropping or reducing signing bonuses, which have become popular over the past year as companies have tried to attract new workers amid an increasingly fraught job market. The survey showed that another 44% are canceling their shows entirely.

“Respondents are also taking proactive steps to organize the workforce and create an appropriate skill mix for workers for the future,” the survey said. “This comes as no surprise. After the hiring frenzy and tight job market over the past few years, executives are seeing the difference between having people and having people with the right skills.”

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However, the report showed some inconsistencies within the labor market: Although companies were reducing their workforce, nearly two-thirds said they had increased wages or increased mental health benefits. Nearly 70% of companies reported allowing more employees to work from home permanently.

The survey comes amid growing concerns that The Federal Reserve’s war on inflation It can lead to stagnation.

Policy makers agreed Another big rate hike of 75 basis points – three times the usual size – at their meeting in July and they have since indicated they are “nowhere near” ending this tightening cycle, despite signs of a slowdown in the economy.

While some parts of the economy appear to be declining – namely the housing sector – the labor market has proven to be a bright spot for several months.

Job growth last month blew past expectations, as employers added a staggering 528,000 new jobs, pushing the unemployment rate to a historic low of 3.5%.

However, there are signs that the labor market is weakening. A large number of companies, including Alphabet’s Google, Walmart, Apple, Meta and Microsoft, have announced hiring freezes or layoffs in recent weeks.

Federal Reserve Chairman Jerome Powell speaks before the Senate Banking, Housing, and Urban Affairs Committee, as he presents his monetary policy report to the Capitol Hill Committee in Washington on June 22, 2022. (AP Photo/Manuel Balce Ceneta/AP Newsroom)

Federal Reserve Chairman Jerome Powell Last month he described the labor market as “extremely hot” – and that was before the July jobs report – but suggested that there was likely to be some “slackening in labor market conditions” as a result of higher interest rates. However, he remained optimistic that the unemployment rate would not rise much as the central bank aims for the elusive easy decline.

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“I also said that our goal is to bring down inflation and get what’s called a soft landing, by which I mean a fall that doesn’t require a big increase, a big increase in unemployment,” Powell said. “We’re trying to make it happen.”