According to a recent survey, businesses in the US shed 77,770 employees in February 2023, down from 1,02,943 a month prior. The tech sector continued to feel the heat of a financial bloodbath, as it led the layoff tally by cutting 21,387 positions, or 28% of all reductions.
As per Challenger, Gray & Christmas, an executive outplacement agency, the IT sector has made 63,216 total layoffs, up 33,705% over the 187 losses disclosed during February 2022. Almost 35% of all job cuts for 2023 have been announced in this sector.
“Employers are undoubtedly interested in the Fed’s plans to raise rates. Several people have been making other cost reductions while preparing for a slump for months. Layoffs are often the final step in a company’s cost-cutting strategy if things continue to chill,” Andrew Challenger, the senior vice-president of Challenger, Gray & Christmas said.
“Right now, the vast bulk of layoffs are occurring in Technology. Currently, as consumer spending fits the state of the economy, both retail and financial sectors are pulling back,” he added.
Additionally, the report stated that the healthcare/products sector, which includes hospitals and companies that produce medical supplies, announced the second-most layoffs in February 2023, with 9,749. This brings the year’s total to 16,482, which represents an increase of 85% over the 8,928 sackings announced at this time in 2022.
Compared to the 761 job cutbacks announced in the sector during the same period in 2022, retailers have announced 17,456 cuts in 2023, an increase of 2,194%.
Financial institutions have made 17,235 layoffs, which is 1,401% more than the 1,148 cuts disclosed in January and February of 2022.
According to the report, the fintech sector shed 4,675 jobs in the first two months of 2023, or 45% of the 10,476 jobs the industry eliminated overall in 2022.
The media sector has already revealed plans to eliminate 9,738 jobs in 2023, a 158% rise from the 3,774 job cuts planned throughout 2018.
Meanwhile, as the American tech sector continues to bleed financially, resulting in more and more layoffs, a presidential advisory sub-committee reportedly has recommended the Joe Biden government extend the grace period for H1-B workers from the existing 60 days to 180 days so that these professionals get enough opportunities to find new jobs/other alternatives.
“The immigration subcommittee recommends the Department of Homeland Security and the US Citizenship and Immigration Services (USCIS) to extend the grace period for H1-B workers, who have lost their jobs, from 60 days to 180 days,” Ajay Jain Bhutoria, member of the President’s Advisory Commission on Asian Americans, Native Hawaiians, and Pacific Islanders, remarked recently.
The official also highlighted the significant challenges faced by H1-B workers after losing their jobs. During the existing 60-day grace period, not only do they have to find a new job, but also need to complete the paperwork for transferring H1-B status, and delays in processing at US Citizenship and Immigration Services (USCIS). Due to this, many H1-B workers are forced to leave the country which could result in a loss of skilled labour for the United States, Bhutoria said.