Middle management job cuts raise fears of US ‘white-collar recession’
A wave of lay-offs in middle management has raised fears the US is heading towards a “white-collar recession”, according to economists and recruiters.
In previous downturns, blue-collar employees including construction workers and truck drivers have tended to be the first to lose their jobs, but this time American companies have been focusing headcount reductions on middle managers working in office jobs.
In recent weeks, a number of companies including Walmart, Ford, Gap, Zillow and Stanley Black & Decker have announced they plan to cut jobs at their head offices.
Low-wage staff in stores, restaurants and hotels were the first to lose their jobs after the Covid crisis took hold in March 2020. But now these are the very people in short supply.
The leisure and hospitality sector employs 1.1mn fewer workers compared with the level in February 2020.
Many chief executives had been considering thinning out management ranks even before persistent inflation raised recession fears and pushed them to cut costs.
The stereotypes of unhelpful bureaucrats inspired what McKinsey senior partner Bill Schaninger calls a “30-year assault” on middle managers. The pandemic accelerated it by demonstrating that senior leaders could quickly make strategic and operational shifts without the support of their broader teams, he said.
Gilbertson at UKG said: “There’s a significant portion of the population who will have to delay the American dream because they can’t find the role that they want.”
But even if new managerial roles do dry up, Gilbertson expects employers to continue hiring for blue-collar roles. The so-called laptop class might find those jobs more appealing than before the pandemic, he said, as they’ve recorded strong wage growth over the past two years.
“As an economy, there should be plenty of jobs available,” Gilbertson said. “They just might not be the kinds of jobs that workers want.”
This story originally appeared on: Financial Times - Author:Taylor Nicole Rogers
