Companies are at an intersection where a recession, remote working and returning to the office all converge.
Although tech layoffs have claimed the majority of workplace headlines recently, this trend is still largely industry-specific and isn’t necessarily applicable to all companies. These layoffs are coming from a need to consolidate expenses due to the forecasted recession and high inflation.
However, most companies are instead turning to other areas of the business that are financially draining: real estate and software.
For instance, moving company Dumbo Moving recently downsized around 200 of its offices into storage, as well as another 100 intro smaller offices in an effort to mitigate expenses before the recession truly hits.
“From their point of view, this is one of the base expenses they have to deal with, and if in fact they can get rid of it in a way that keeps their own employees happier than before, then that seems to make sense all around,” said Arpit Gupta, an associate professor of finance at New York University.
While it’s more likely for an organization to trim down on benefits like free coffee and other perks, this doesn’t solidify job security for all. But before getting nervous, perspective is essential.
According to data from the Bureau of Labor Statistics, layoffs reached near historic lows in October, likely as a result of lessons learned from the mass job cuts seen during the initial days of the pandemic.