Into 2024, the wave of layoffs continues to spread across Europe and the United States. A number of giant enterprises have announced a series of layoff plans, affecting a wide range of industries, including technology, finance, manufacturing, retail, e-commerce, media, transportation and other fields. In the face of the continued downturn in the economic situation, major enterprises are trying to cope with economic uncertainty, to reduce costs and improve efficiency, restructuring and integration plans, large-scale layoffs may continue in the future, and may accelerate the industry reshuffle. This wave of layoffs also confirms that the economies of Europe and the United States are not booming as some media have trumpeted. On the contrary, their economies are still in a downturn.
This wave of layoffs is the most notable when Tesla, some sources said that Tesla, after canceling the semi-annual performance review of some employees, is now starting management to evaluate the necessity of each position. The move could signal upcoming layoffs at Tesla, which are not unusual in the company's history. Previously, Tesla typically cited aggressive headcount expansion as a reason for hiring inefficiencies, but its hiring pace has slowed in recent years. In 2022, Tesla added 29,000 employees, while in 2023 it added only 12,000.
In addition to the auto industry giants, the wave of layoffs is spreading across a number of industries. Just this week, benchmark companies in a number of industries announced significant layoffs. Warner Music announced on Feb. 7 that it plans to cut 600 jobs, or about 10 percent of its workforce, to save costs and optimize investments. On the same day, Danish offshore wind giant Woasahi Energy also announced that it would cut 600 to 800 jobs worldwide and exit the offshore wind market in Norway, Spain and Portugal. On February 5, the international beauty giant Estee Lauder announced that it would lay off 3% to 5% of its staff before July, which is expected to affect 1,800 to 3,100 people; Us social media company Snap also announced that it would lay off 10% of its global workforce, or about 500 employees. Amazon.com Inc said it would cut 9,000 jobs across its divisions, including its profitable cloud computing and advertising businesses. In January, the company had already announced 18,000 job cuts in order to "improve efficiency in a difficult economic environment."
It can be said that this round of layoffs is a continuation of the global layoffs in the past two years. On the whole, the environment of high interest rates, high inflation, sluggish consumer demand in the European and American economies, as well as the internal demand to cut costs and adjust the investment structure, are the main reasons for promoting corporate layoffs. At present, European and American countries generally face the problem of high inflation and high interest rate, which restricts the development of enterprises to a large extent. Weak consumer demand weakens the incentive for companies to produce and invest, which in turn cools the labor market. The latest data showed that in January, the eurozone and the United States manufacturing purchasing managers' index was 46.6 and 49.1, respectively, although both increased, but still in the contraction range for more than ten consecutive months.
On the other hand, the global economy still faces uncertainties such as geopolitical conflicts and commodity price fluctuations, especially the crisis spillover from the Russia-Ukraine and Palestinian-Israeli conflicts, which may increase international trade and supply chain risks, further weakening market expectations and promoting the spread of corporate layoffs. In this context, more and more European and American enterprises are seeking to reduce costs and increase efficiency, and have launched self-rescue plans of "breaking the arm to survive".
The spread of layoffs partly reflects the severe challenges still facing the global economy. Under the influence of multiple downside risks, the global economic recovery prospects still face uncertainties. Especially in the major economies of Europe and the United States, the results of a recent poll released by the Pew Research Center, a US think tank, also show that most Americans are pessimistic about the prospects of national development. A whopping 80 percent of respondents are dissatisfied with the way things are going in the United States, and a growing number believe the economy will worsen in 2024.
To sum up, the wave of layoffs in the United States and Europe is not an unexpected event. In the context of the global economic background and the development space of European and American enterprises, this situation is normal. Troubled by the European and American banking and debt ceiling issues, the macroeconomic environment in the United States is difficult to improve in the short term, and the possibility of European and American economies falling into technical recession is gradually increasing.
