In the US end of the tech-eldorado? Thousands of layoffs in IT and fintech

According to a Challenger, Gray & Christmas report, in May alone there were 4,044 cuts in information technology companies, +781% compared to the 459 recorded from January to April. And in innovative finance companies +268% 03 Jun 2022 Veronica Balocco

Technology, fintech, construction and automotive. These are the four U.S. market sectors that saw more job cuts announced in May than in the previous four months combined. Tech companies, in particular, announced 4,044 cuts in May, up 781% from 459 from January to April, while fintech companies announced 268% more cuts in May than in the first four months of 2022. This is stated in a report by the global relocation and business & executive coaching company Challenger, Gray & Christmas (DOWNLOAD THE FULL REPORT HERE), according to which the trend is still positive: the total of US-based employers announced a total of 20,712 cuts in May, thus recording a decrease of 14.7% compared to 24,286 in April. The figure is also 15.8% lower than the 24,586 cuts announced in May 2021. So far, in 2022, employers have announced plans to cut 100,694 job cuts, down 48% from the 192,185 cuts announced in the same period of 2021. It's the lowest total recorded from January to May since Challenger began tracking monthly job cut announcements in 1993. Index of topics • IT sector the most affected • Declining risks of unemployment benefits • Construction and automotive • Hiring announcements on the rise IT sector the most affected Therefore, the criticality of the four sectors remains, out of the 30 analyzed, which record thoughtful growth in cuts, a sharp increase compared to the previous 4 months combined. U.S. tech employers cut nearly nine times more jobs in May than in the first four months of the year, as rising inflation and slowing demand force companies to cut costs. The monthly total is the highest since December 2020, when tech companies cut to 5,253 jobs. Declining claims for unemployment benefits In 2022, fintech companies announced 2,059 cuts, a 270% increase from the 556 announced in the first five months of 2021. "Many tech startups that have experienced tremendous growth in 2020, particularly in the real estate, financial, and delivery sectors, are starting to see a slowdown in users, and along with concerns about inflation and interest rates, are restructuring their workforce to reduce costs," says Andrew Challenger, senior vice president of Challenger, Gray & Christmas. In this context, the impact of the Ukrainian crisis, high inflation for four decades and rising interest rates have led to forecasts of cuts by companies such as Snap and Microsoft, while others such as Meta Platforms have slowed hiring to contain costs. Construction & Automotive At the same time, inflation and rising interest rates are beginning to affect the housing market. Construction firms announced 817 job cuts in May totaling 1,150, a 55 percent increase from the 741 cuts announced through May 2021. It's the highest monthly total for the industry since October 2020, when construction firms announced 967 cuts. "After the housing frenzy of the past 18 months, demand has cooled slightly, which will lead to job cuts in related sectors," Challenger adds. Automotive, for its part, announced the second highest number of cuts last month with 2,918 for a total of 5,380, up 6.6% from the 5,049 cuts announced through May 2021. "Automakers and suppliers are still facing supply chain issues, a shortage of semiconductors and now record gas prices that are pushing consumers towards electric vehicles. Almost all major automotive companies have started to focus on these vehicles, also causing workforce restructuring," concludes Challenger. Hiring announcements on the rise Employers in the U.S. announced 126,083 hiring plans in May, primarily on plans from Ace Hardware to hire 40,000 employees and 7-Eleven, which plans to hire 60,000. So far this year, Challenger has tracked 612,686 hiring announcements, up 39% from the 441,696 hiring plans announced through May last year. It's the second highest January-May hiring total since the company began tracking hiring plans in 2006. The record occurred in 2020, when 1,260,661 hiring plans were announced in the first five months of the year.