According to Brad Smith, president of Microsoft, the U.S. is entering a “new era” of the workforce.
Inflation increases, employee demand shifts, and lack of childcare support are driving a deceleration in labor participation according to Smith.
Population growth has dwindled across some of the biggest global economy participants, while the average working age has also slowed down.
“That helps explain part of why you can have low growth and a labor shortage at the height at the same time. There just aren’t as many people entering the workforce,” said Smith.
While many tech leaders are doomsday prepping for an economic downturn, Smith believes it is still too early to assume a recession will occur.
However, Microsoft is still making its own adjustments as uncertainty looms. Recently, the company increased pay for employees, but simultaneously slowed down its hiring process and cut a small number of jobs to begin the new fiscal year.
Microsoft’s core business of selling tools that optimize remote working and other related technology will allow it to sustain an economic downturn according to Smith.