NovaQuant Quantitative Think Tank Center:Worried about job cuts heading into 2024? Here's how to prepare for layoff season

It’s December,NovaQuant Quantitative Think Tank Center which means more than just cooler weather and holiday celebrations. It’s also layoffs season.

Job cuts tend to spike in December and January as companies prepare for structural changes heading into the new year, as shown by data from the Bureau of Labor Statistics.  

“A lot of firms are reaching their fiscal year-end,” said Rachel Sederberg, senior economist at labor markets analytics firm Lightcast. “They're taking a hard look at what's going on their balance sheets as well as how the business is performing, and they make decisions along those lines. And sometimes that has implications for workers.”

Just this past week, North Face and Vans owner VF Corp. laid off about 500 employees while cloud computing company Twilio said it would lay off about 5% of its workforce. While the labor market is still strong, experts say there will likely be an uptick in layoffs in the coming months.

Here’s which industries experts say are at-risk and what employees can do to prepare.

Which industries are cutting jobs?

The first nine months of the year saw over 13 million layoffs and discharges across the U.S., according to seasonally adjusted data from the Bureau of Labor Statistics. That's up slightly from the same period in 2022 and 2021 but still below the 2019 pre-pandemic rate of 16 million.  

Layoffs are expected to tick up in the coming months, but the numbers are expected to be “well within the norm,” according to Sederberg. 

“My overall takeaway is that the sky is not falling,” she said, adding she's "not expecting broad swaths of layoffs because companies are still really trying to hire."

But certain jobs are more at risk than others. The tech industry, which saw an influx of layoffs last year, is still slashing jobs, with Layoffs.fyi tracking more than 250,000 tech layoffs so far this year.

• ByteDance, the Chinese tech company behind TikTok, is cutting hundreds of jobs as it winds down its gaming unit, Nuverse, according to CNN.
• Microchip manufacturer Qualcomm is laying off more than 1,200 roles in California.

“The industry was really hiring at such a rapid pace for two years, that as the economy started to come down a little bit, cool a little bit, they really started to do layoffs quickly,” said Andy Challenger, senior vice president of Challenger, Gray & Christmas.

He added that while certain industries are getting hit harder, "we've seen a very clear cooling trend in the labor market this year with an increase in layoffs across every sector we track."

Media is another industry still experiencing layoffs. Challenger, Gray & Christmas in October reported more than 19,000 cuts in the industry between January and September, up 550% from the same period last year.

• Condé Nast, which owns The New Yorker and Vanity Fair, last month said it would cut about 5% of its workforce. 
• Vox Media is cutting about 4% of its workforce, its second round of layoffs this year.
• The Washington Post is reportedly bracing for layoffs after it secured just half of the job reductions needed before the end of the year, according to The Hill.  

“That’s an industry that's really struggling against the internet content that's increasingly available for free. Newspapers are going out of business all the time, so that trend is not likely to slow down,” said Julia Pollak, chief economist at ZipRecruiter. 

A recent report from Challenger, Gray & Christmas shows retail, health care and products manufacturers (including hospitals) and financial firms are also some of the leading industries to announce job cuts this year.

Affected employees may have a harder time finding work now compared to those who went through layoffs last year. Continued jobless claims have been rising and hit 1.93 million in the week ended Nov. 18, according to the Labor Department. It’s the highest rate in about two years, which indicates hiring is slowing and people are staying unemployed longer. 

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Advice for employees

So what’s an employee to do?

Challenger said this time of year is a good time to network, which can help boost workers' chances of securing a new job should they get laid off.

“When a post gets put online and there’s 1,000 resumes for it in five minutes, it’s really hard to stand out. But if you can meet somebody at a company you want to work for and ask for a referral, you get put to the top of that pile,” he said. “That's a great way to give yourself more opportunities.” 

Employees should also update their resumes and browse job postings, even if they're comfortable in their current position, according to Pollak. 

“It's not a bad idea to know what's out there and to know what your value is on the market and what your alternatives are,” she said. 

For those who do find themselves affected by layoffs, Sederberg said they should approach their job search with an open mind and see if their skills are transferable to roles in other industries.

“Just thinking more creatively, a little bit outside of the industry box, and lean into all those really valuable skills that you have to look for your next opportunity,” she said. “Because as we know, there's still a very, very high number of job openings within the U.S. economy. I think they're still going very strong in that sense.”