The strike in corporate America has spread from tech to conglomerates.


This article originally appeared on The Morning Brief. Get the Morning Brief delivered straight to your inbox every Monday through Friday at 6:30 am ET. Subscribe

Wednesday, January 25, 2023

Today’s newspaper Miles abroadHead of News at Yahoo Finance. Follow him on Twitter. @MylesUdland And on LinkedIn. Read this and more market news on the go Yahoo Finance app.

The decline of the tech sector is the biggest economic story of 2023.

And now, those layoffs seem to be spreading to new corners of corporate America.

On Tuesday morning, 3M ( MMM ) announced it would cut 2,500 manufacturing jobs, after the company called slower-than-expected growth due to “a rapid decline in consumer-facing markets — a dynamic that accelerated in December — coupled with a significant slowdown in China due to Covid-related disruptions.”

The 3M news follows Monday’s announcement from Newell Brands (NWL), the sharpie maker, that it will cut its office staff by 13%.

Sharpie markers owned by Newell Brands are on sale at a store in Manhattan, New York City, US, February 7, 2022.  REUTERS/Andrew Kelly

Sharpie markers owned by Newell Brands are on sale at a store in Manhattan, New York City, US, February 7, 2022. REUTERS/Andrew Kelly

With so many layoff stories in the headlines, public data showing that employment is still strong has become more challenging for investors and the general public.

This month alone, tech companies announced more than 50,000 layoffs, including Amazon ( AMZN ) , Alphabet ( GOOG , GOOGL ) and Microsoft ( MSFT ) .

This week’s news suggests executive comfort with the announcement that layoffs are growing in this area.

Still, the US economy added 223,000 jobs in December. The unemployment rate is at its lowest level in more than 40 years. Last week, 190,000 workers filed for unemployment insurance, the fewest in four months.

Bob Schwartz, senior economist at Oxford Economics, wrote in a note to clients last week that “rising strikes in the tech sector do not appear to support the broader labor market, as these workers are simply displaced.”

And of course the size of these job cuts matter – data from S&P Capital IQ indicates that 3M will employ 95,000 people. Newell, meanwhile, employs 32,000 people, according to S&P Capital IQ.

Newell’s cutters are a bit deeper than 3M’s. Specifically, Newell said these cuts are for office workers, not manufacturing or other parts of the business.

Therefore, Newell’s CEO Ravi Saligram said, “It will help partially offset the impact of the macro-economic pressures on the business,” but the company’s announcement was heavy on the advisory-binding language – “stupid”, “directional” and “optimized” in all aspects. .

This is a gradual and gradual corporate restructuring.

And regardless of the economic environment, some company always wants to restructure its business and, in turn, reduce the number of heads.

What’s more, this week’s non-tech cuts come at a time when pockets of the economy are still struggling with labor supply. Shortcomings.

A labor shortage for nurses continues to weigh on the healthcare system, 3M CFO Monish Patolawala said on a call with analysts on Tuesday. For 3M, that meant slower growth in the medical solutions segment in the fourth quarter due to fewer elective procedures.

In some ways, these dramatic cuts can strengthen the commitment of executive teams, so it’s the perfect time to cut staff. After all, there is a huge demand for workers. Maybe it’s not the right role for you.

So as layoff announcements continue to roll in during corporate earnings over the next few weeks, the line used by Coinbase ( COIN ) CEO Brian Armstrong to announce his own company’s layoffs earlier this month is standing out.

“Over the past 10 years, we, along with most technology companies, have focused heavily on developing headcount as a measure of success,” Armstrong wrote. “Especially in this economic climate, it is important to turn our attention to operational efficiency.”

The challenges for a company like Coinbase, in a fledgling, emotion-driven market, and a 3M or Newell, which makes things like notebooks, glue and gauze — among thousands of other products in hundreds of end markets — in many. The paths could not be more different.

But there are not many businesses in this country that are publicly traded and under pressure from stock prices and shareholders.

And the set of decisions these leadership teams face around hiring, firing, and acquisition are often more similar than they are different.

So when one CEO says the time is right to “shift our focus to operational efficiency,” much more follows. How far that message travels will be one of the stories of the year.

What to see today

Economy

Revenues

  • Tesla (TSLA), Abbott Laboratories (ABT), AT&T (T), Nasdaq (Christmas) Boeing (BA), We have Ethan (ETD), Kimberly-Clark (KMB), Lending Club (LC), Levi Strauss (LEVI), Progressive (PGR), Metal flexible (STLD)

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app Apple Or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedInAnd YouTube





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *