2023 Layoffs: These Jobs Are Next On The Line

Meta Inc will lay off thousands more workers this year. (Representational)

It raises the question: Even after the thousands of layoffs we’ve seen in recent months, which industries might look to toss more staff on the scrapheap?

World News(c) 2023,

BloombergAlex Webb, Bloomberg

Updated: March 13, 2023 5:57 pm IST

Another week, another round of job cuts– this time Meta Platforms Inc. is adding to the 11,000 people it fired in November with thousands more, Bloomberg News has reported.

It raises the question: Even after the thousands of layoffs we’ve seen in recent months, which industries might be looking to toss more staff on the scrapheap? The answer, based on an analysis of earnings and stock performance, appears to be the financial and health-care sectors.

Here’s how I reached that conclusion. In the S&P 500 there are 105 companies whose revenue per employee-the average amount of revenue generated by each worker-has declined from pre-pandemic levels; i.e., 2019. That’s a pretty good gauge for how efficiently a company is run. It means that either sales have declined or management hired new staff faster than it could expand the business-head count growth exceeded sales growth.

Of those 105 stocks, some 60 have outperformed the broader market over the past year. That might lead you to conclude there’s less pressure on the executive team to right the ship and improve profitability. That won’t, of course, always be the case. Meta has performed better than the S&P 500, not least because of its earlier layoffs, but that doesn’t seem to be stopping Chief Executive Officer Mark Zuckerberg from slashing more jobs. The social media giant’s 14% decline in revenue per employee from 2019 to 2022 was one of the more extreme drops among companies in the index.

Eliminating those companies leaves 45 stocks that both are underperforming the rest of the market and have declining sales per employee. And within that group, the biggest cohort is the 12 financial companies, followed by 10 health-care companies. Among the big names are Bank of America and Citigroup from the banking industry, both of which employ hundreds of thousands of people, as well as the Minneapolis-based medical device maker Medtronic.

The number of companies from those two industries on my list isn’t just a function of their outsize presence in the index as a whole-they’re in fact overrepresented compared with the weight they carry in the S&P 500.

The roster also includes Amazon.com Inc., another tech giant that’s already announced huge head count reductions. But those 18,000 roles it slashed represent just 1.2% of the 1.5 million people the company employed at the end of 2022. With the stock still trading near historic lows compared with expected earnings, founder Jeff Bezos’ lieutenants might well determine there’s scope to cut more.

Companies have other levers to pull to spur sales and profit growth before they resort to staff reductions. Yet even if executive teams are happy to retain their current staffing levels, activist investors on the prowl for targets might cite the “bloated workforce” as evidence of current management’s lack of rigor. For America’s beleaguered workforces, the bad news may not be over yet.


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