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US layoffs reportedly surge as tech slashed thousands of jobs

Layoffs in the United States hit a
more than two-year high in January as technology firms cut jobs
at the second-highest pace on record to brace for a possible
recession, a report showed.

The layoffs impacted 102,943 workers, a more than two-fold
jump from December and an over five-times surge from a year
earlier, according to the report from employment firm
Challenger, Gray & Christmas Inc.

Companies from Microsoft Corp to Inc
and Goldman Sachs Group Inc cut thousands of
jobs last month in a bid to ride out a demand downturn as
consumer and corporate spending shrinks due to high inflation
and rising interest rates.

“We’re now on the other side of the hiring frenzy of the
pandemic years,” said Andrew Challenger, labor expert and Senior
Vice President of the employment firm. “Companies are preparing
for an economic slowdown, cutting workforce and slowing hiring.”

READ MORE: Microsoft lays off 10,000 employees as job cuts in tech sector spread

The push to correct pandemic excesses has been most evident
in the tech sector, which slashed 41,829 jobs last month, the
highest across industries.

Retailers, second after tech, cut 13,000 positions in
January, compared with virtually no layoffs a year earlier.
Financial firms, meanwhile, shed 10,603 jobs last month, up from
696 roles a year earlier.

With the Federal Reserve expected to continue on its
rate-hiking path to stamp down inflation that is still on the
higher side after several rounds of rate increases, analysts
said more layoffs could be in store for US companies.

“For companies that ramped up headcount over the past few
years, they will likely shrink their workforce as the economy is
headed towards a rough patch,” OANDA analyst Edward Moya said. 

READ MORE: Amazon to layoff more than 18,000 employees: CEO

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