[ad_1]
As the Federal Reserve (Fed) deliberately slows the economy by raising interest rates to boost unemployment and lower wage demand for workers, the U.S. economy is also experiencing sluggishness outside of the tech sector. Layoffs are increasing.
The main industries affected include manufacturing and retail. dow chemicalThe Midland, Michigan-based chemical, plastics and consumer goods manufacturing giant announced Thursday it will cut 2,000 jobs.
Dow Chief Executive Jim Fitterling said in an earnings call with analysts that job cuts were necessary after corporate earnings fell 32.5% in 2022. He said the sharp decline in sales was a result of worsening economic conditions in the second half of the year.
The Dow job cuts are part of a global cost-cutting program announced in October to save $1 billion in 2023. These cuts include European factory closures that have yet to be announced.
Also on Thursday, Toy and Board Game Company Hasbro Inc. has announced organizational changes that include cutting 15% of its workforce, or about 1,000 jobs. Hasbro CEO Chris Cocks said in a statement that headcount reductions are necessary to achieve cost savings of $250 million to $300 million over the next three years.
Cox also said the fourth quarter of 2022 “represented a challenging moment” for the $8 billion company.Like many publicly traded companies on Wall Street, Hasbro ‘s stock will almost halve in 2022. Cocks said the company is “on track to drive significant cost reductions across the board” as the financial elite demand cost cuts and layoffs to restore profitability. Improve business and our overall competitiveness. ”
According to media reports on Friday, the computer chip maker Intel Corp. planned to double the number of planned layoffs at its headquarters in Santa Clara, Calif., to a total of 378.
In the retail sector, 5 days off saxThe Hudson Bay-owned discount retailer laid off an unspecified number of employees on Tuesday. Saks.com We have laid off about 100 employees, or 3.5% of our workforce.
stitch fixa provider of personalized apparel, shoes and accessories, laid off 20% of its office workers and closed its distribution center in Salt Lake City, Utah.
WayfairInc., an e-commerce provider of furniture and home goods, has announced it will furlough 10% of its workforce, or 1,750 people.
giant software company SAPsaid it would cut 3,000 jobs, or 2.5% of its workforce, after profits fell dramatically in 2022. company.
Mucic said the layoffs were aimed at “increasing our focus on strategic growth areas.” SAP’s net profit fell 47% in the fourth quarter of 2022. This is partly due to the company’s withdrawal from Russia and Belarus after a proxy war between the US and NATO began in Ukraine.
Other mass layoffs expected disneyplans to announce its corporate restructuring plan in early February. on thursday deadline Regarding Robert Iger’s return as Disney’s CEO, it wrote, “Speculation of pending corporate restructuring has increased, and with it, rumors of layoffs are likely to continue.”
The U.S. Department of Commerce released its Gross Domestic Product (GDP) report on Thursday, showing the economy grew 2.9% on an annualized basis in the fourth quarter of 2022. This number is down from 3.2% growth in the third quarter.
Bank of America economist Michael Gappen said: new york times“The economy continued to gain momentum. At the end of the year, there was more momentum in the economy than we thought, and a lot of it came from households.”
But the Department of Commerce also reported on Friday that consumer spending in December fell at a seasonally adjusted rate of 0.2% from the previous month.
Households cut back on spending on commodities, and prices of gasoline and other energy products fell, according to the Consumer Expenditure Report. Meanwhile, consumers increased their spending on services with higher prices.
Professor Ephraim Benmelek of Northwestern University said of the decline: wall street journal“The Fed’s actions are leading to lower consumption.” Benmelech said rising interest rates have made mortgage costs higher and reduced spending on appliances, paint and other home improvement products. Added.
In response to these developments, Wall Street rose again on Friday, with the NASDAQ up 11%, the S&P 500 up 6% and the Dow up 2.5% so far this year. The next Federal Reserve Board meeting is scheduled for Jan. 31-Feb. 1, and interest rates are expected to rise another 0.25-0.50%.
In a January 19 speech, Federal Reserve Vice Chairman Lael Brainard emphasized that the central bank is not backing down. “Inflation remains high and policy will need to remain sufficiently restrictive for some time to bring it down to 2% sustainably,” he said.
In other words, the financial elite argues that policies that mount a sharp slowdown and increasing assault on working-class jobs and living standards must continue.
[ad_2]
Source link
