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Corporate America has taken to laying off a large number of
their workforce, as aggressive interest rate hikes by the
Federal Reserve to tame inflation have besmirched the United
States' economic outlook, stoking fears of a potential
recession.
Despite the drop in job cuts in the month, layoffs in June were
higher than the corresponding month a year earlier, the report
said.
Technology companies continue to lead job cut announcements with
141,516 layoffs in the first half of the year, compared with
about 6,000 in the same period last year.
The sector laid off nearly 5,000 employees last month, the
report said.
"In fact, June is historically the slowest month on average for
announcements. It is also possible that the deep job losses
predicted due to inflation and interest rates will not come to
pass, particularly as the Fed holds rates," said Andrew
Challenger, senior vice president at the employment firm.
Meta Platforms had slashed jobs in May, part of a plan announced
in March to eliminate 10,000 roles.
Like its peers, Amazon.com in March had said it would axe
another 9,000 roles as a part of its second retrenchment drive,
as investors also persuaded the firms to cut costs.
After a round of multiple rate hikes, the Fed unanimously kept
its interest rates steady at the central bank's June meeting
that could freeze layoffs and allay fears of employees.
"Probably we have already seen the tech sector shed the bulk of
its 'at risk' workers, and as such I would expect further Fed
tightening to now impact more heavily on other sectors of the US
economy," said Stuart Cole, chief macro economist at Equiti
Capital.
(Reporting by Akash Sriram and Jaspreet Singh in Bengaluru;
Editing by Maju Samuel)
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