Widespread tech layoffs continue, but Morgan Stanley says they’re not representative of the broader labour market
As widespread tech layoffs continue, some analysts are predicting the broader labour pool will be ok.
Meta, Amazon and Twitter are just a few of the many tech-based companies that have shown thousands of employees the door over recent weeks.
The massive staff cuts are happening at rates not seen since the early days of the Covid pandemic.
But despite this, analysts at Morgan Stanley analysts say the broader labor pool is not in danger – at least, not yet.
They believe the large market cap of tech firms coupled with excessive hiring is resulting in the sector’s recent layoffs.
It’s also important to note that layoffs since December 2020 equate to 187,000.
While this is a sizeable figure in itself, it’s also barely more than 0.1% of total U.S. payrolls.
Regardless, Morgan Stanley still anticipates a “sharp” drop-off in employment growth, citing slower consumer demand as a trigger for hiring cutbacks across most sectors.
For senior executives at broader markets, Morgan Stanley says “it is important for companies to evaluate how to better manage cash flow” as they adjust to a “slower ’23 world.”
