More Americans May Lose Jobs Around Christmas Time

A "Now Hiring" sign in front of a Chipotle restaurant in Washington on Oct. 7, 2022. Anna Moneymaker/Getty Images

The trend of rising job cuts seen in the past few months could accelerate in December and January, which are usually seen as the peak period of job cuts.

An analysis of data from the Bureau of Labor Statistics (BLS) by the Wall Street Journal shows that December usually ranks at the second spot when it comes to monthly layoffs and discharges, while January takes the top spot on the list. Speaking to the media outlet, Nick Bunker, economic research director for North America at Indeed Hiring Lab, noting seasonality of the labor market as a possible explanation for the timing of the layoffs.

Different industries are busy at different times of the year, Bunker said while pointing to the retail sector as an example.

“There is lots of seasonal hiring in October and November to ramp up for the holidays when there’s a boom in demand and then people are let go in January because Christmas happened,” he says.

According to data from global outplacement and career transitioning firm Challenger, Gray & Christmas, the pace of job losses began picking up in September, jumping to 29,989 job cuts from 20,485 in August. This again rose to 33,843 in October, an increase of roughly 65 percent from the previous month.

In November, job cuts surged to 76,835, up 127 percent from October and 417 percent from November last year. November was the sixth time in 2022 that job cuts were higher than the corresponding month a year back.

Tech Layoffs

Out of the 76,835 job cuts in November, the tech sector alone accounted for 52,771 cuts, representing over 68 percent of the total job losses. This is the highest monthly total for the tech sector since 2000.

Until November, tech job cuts amounted to 80,978 for the year, which is 535 percent higher than the same period in 2021.

The job losses in December and January are also driven by companies trying to minimize costs and start the new year with a new, stronger balance sheet.

Supply chain issues, rising interest rates, and softer global demand have some company heads worried, according to J.P. Gownder, vice president and principal analyst with advisory firm Forrester Research Inc.

“They want to set up finances for success in 2023,” he said, according to Wall Street Journal. “It’s a good bet that tech companies that haven’t yet laid off employees are carefully considering whether or not to do so. It wouldn’t be surprising to see more layoffs in the next few weeks.”

Career Cushioning

With the threat of job cuts looming, some employees are engaged in a practice called “career cushioning,” meaning that they keep their options open for any unexpected layoffs.

This is done by polishing resumes, acquiring new skills, boosting networking, and so on—all in the hopes that if they were to be laid off suddenly, these preparations would help in securing a new job faster.

“There’s a bit of a game of musical chairs playing out, and employees don’t want to be caught out when the music stops without a seat,” Mark Royal, a senior client partner at the global organizational consulting firm Korn Ferry, told CNBC.

According to Julie Kratz, founder and CEO of leadership training organization Next Pivot Point, employees will be afraid in the “absence of information.”

If a company is laying off workers, it is advisable that management quells this fear among employees by being clear about how many jobs they plan to cut, she said.