Lyft and Deloitte have announced plans to lay off around 1,200 employees each, which has further shaken the already resilient labor market. The announcement follows reports of layoffs at Whole Foods and Meta, the parent company of Facebook. Additionally, BuzzFeed News announced its shutdown, which resulted in the loss of 180 positions.
The series of layoffs in the United States has been attributed to the unstable economy and rising interest rates. The tech, financial services, and housing sectors have largely managed to contain job losses, but the labour market is nonetheless tight, with a 3.5 percent unemployment rate in March.
According to Lyft CEO David Risher, the firm had to make the layoffs in order to lower expenses and reorganise itself so that executives were more accessible to customers and drivers. Deloitte, meanwhile, blamed the job losses on a slower expansion in a few practises.
For some economists, the most recent round of layoffs is not a sign of a labour market in freefall or one that is coming to a grinding halt, but rather is a sign that the economy is attempting to adjust to a new normal. Despite a decline, inflation remains high, which prompted the Federal Reserve to boost interest rates in an effort to slow the economy and bring down consumer prices. Uncertainty persists, though, as the 5,000 increase in unemployment claims for the week ending April 15 suggests a further downturn.
The US economy is still anticipated to rise in 2023 despite the uncertainty. However, it is impossible for policymakers to gain a current read on the economy, making it difficult to predict where the nation is headed. At its meeting in the first week of May, the Federal Reserve is predicted to raise rates by another quarter of a percentage point, which could discourage businesses from growing or adding staff. The layoffs at Deloitte or Lyft, however, are not being interpreted as a warning for the rest of the economy.