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U.S.-based companies announced over 153,000 job cuts in October, marking the highest total for the month in over two decades, according to a report by Challenger, Gray & Christmas. The firm stated that this is also the largest number of job cuts for a single month in the fourth quarter since 2008. From January through October, nearly 1.1 million jobs have been cut, the most since the onset of the COVID-19 pandemic in 2020.
The trend of job cuts is attributed to various factors, including economic adjustments and company-specific challenges. For instance, Bloomberg reported that companies like Starbucks, Target, Amazon, and Paramount have recently announced significant layoffs, citing reasons such as restructuring, technological advancements, and market demands. Starbucks eliminated 900 corporate positions in September, while Target cut 1,800 roles in October to streamline operations. Amazon attributed its reduction of 14,000 corporate jobs to the integration of artificial intelligence, and Paramount's 1,000 job cuts followed a merger.
Economists are concerned that these layoffs, while individually explainable, collectively indicate a potential shift in the labor market. The trend suggests a move away from the "labor hoarding" seen in recent years, where companies retained workers despite economic pressures.
The current economic environment, characterized by high-interest rates and market volatility, adds to the uncertainty. As Reuters highlighted, the global interest-rate cutting cycle may have peaked, raising questions about the future impact on markets and employment.