US Economy: Recession, Inflation Fears Fuel Companies’ Backtracking On Hiring Plans

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More employers have halted or slowed their hiring plans amid rising inflation and a potential recession.

The hiring slowdown has come from the tech industry. Early in May, companies like Uber, Meta, Snap, Carvana, and Robinhood announced a slowdown or cut in hiring. Some of those companies continued to cut hiring in June.

The Wall Street Journal noted that Twitter, Redfin, and Coinbase have recently rescinded job offers. Netflix, Peloton, Spotify, and Warner Bros Discover have also seen a hiring slowdown.

After months of The Great Resignation and Great Reshuffling, the labor market appeared to be steady. However, according to Reuters, 21,500 tech workers lost their jobs this year. Tech layoffs skyrocketed 780% for the start of 2022. 

Technology isn’t the only industry in a protective mode during uncertain economic times. Some insurance, retail marketing, consulting, and recruiting service companies also saw slowdowns or freezes in hiring. This also includes automakers Ford and Tesla. Tesla CEO Elon Musk said that job cuts could come to Twitter once his $44 billion purchase of the social media platform is complete.

The layoffs are also affecting recent college graduates. While some found success in the jobs market, according to USA Today, many recent graduates told the Journal and Reuters that they feel the effects of these changes.

Meanwhile, the labor market is strong, with the unemployment rate sitting at a half-century low of 3.6%. At the end of May, many Americans felt confident about their job security and the jobs market despite rising inflation. 

However, as inflation lingers and experts warn of a looming recession, that confidence may dwindle. Still, President Biden has maintained optimism that the economy is strong enough to withstand inflation and that a recession is not inevitable

Brian Kropp, vice president of human resources research for advisory firm Gartner, told the Journal that a rescinded job offer was almost unheard of six months ago.

However, “if we’ve learned anything from the last couple of years, it’s that things can change quickly,” he said.

US President Joe Biden said slowing job growth and wages shows the American economy can bring down inflation without sacrificing recent gains Photo: AFP / MANDEL NGAN