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It’s not the most comforting news.
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For months now, economists have been sounding warnings about a potential recession. But with such warnings comes the caveat that the U.S. economy is currently in a solid place, at least from an unemployment standpoint. In fact, the national jobless rate is now at almost its lowest level in 20 years.
That doesn’t mean workers don’t have to concern themselves with layoffs, though. In fact, a major tech company just announced that it will be reducing its headcount. And that should at least serve as a wakeup call for workers across the board.
Salesforce is making cuts
Many tech companies got hammered in 2022 after seeing a nice lift in 2020 and 2021. And Salesforce fell into that same trap. As a result, Salesforce is making plans to cut about 10% of its workforce.
As of January 2022, Salesforce had 73,541 global employees. So in light of this news, a lot of people will soon, unfortunately, be out of a job.
Of course, Salesforce isn’t the only big player in the tech space to announce layoffs recently. Over the past few months, Amazon and Meta have made similar announcements. In fact, Amazon recently announced it plans to cut over 18,000 jobs, more than the 10,000 jobs it initially said it planned to cut.
Should workers be worried about widespread layoffs?
Many tech companies invested in extra staff during the early stages of the COVID-19 pandemic, when consumers changed the way they lived and became more reliant on Big Tech. Now that consumers are shifting back to their pre-pandemic ways, tech firms aren’t enjoying the same level of revenue. So it makes sense that some might seek to lower their headcount.
This doesn’t necessarily mean that companies across the board will be implementing layoffs this year, though. And whether that happens will likely hinge heavily on the turn the economy takes.
If consumer spending holds steady and we’re able to avoid a recession, job loss numbers might remain low, as they’ve been in recent months. But if general economic conditions decline, there could be a notable uptick in layoffs.
If that’s something you’re worried about, one of the best things you can do right now is boost your emergency fund. At a minimum, you should aim to have enough money in your savings account to pay for three full months of essential bills. But if you’re able to pad your savings even more, you’ll put yourself in a better position to get through a period of unemployment.
Of course, boosting your job skills wouldn’t be a bad thing to do at this time, either. But being highly skilled won’t guarantee that you won’t end up on the chopping block.
Unfortunately, hard work and talent don’t always translate into job security the way we’d hope. So if you want to protect yourself from a potential increase in unemployment, give your savings a nice boost while you still have a steady paycheck coming in.
Another move to consider these days? Pick up a side hustle. The extra money you earn could help you grow your savings nicely. And that way, if you lose your job, you might have a back-up source of income to rely on while you look for full-time work.
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