Almost 20 Percent of U.S. Firms Plan to Fire Employees: NABE Survey

A fifth of American companies plan to reduce their workforce as a result of the pressure on margins. Many are anticipating an increase in unemployment. economic recessionAccording to a January survey conducted by the National Association for Business Economics, (NABE), 80% of respondents said so.

Nearly 20 percent of respondents predicted that employment at their companies would fall over the next three months, according to the survey. “For the first time since 2020, more respondents expect falling rather than increased employment at their firms in the next three months. Fewer respondents than in recent years expect their firms’ capital spending to increase in the same period, said NABE president Julia Coronado, founder and president of MacroPolicy Perspectives LLC, according to a post The NABE.

Only 12 percent of respondents said their headcount would increase in the next three-months. This is half the number of companies that reported an increase in employment over the last three months. Sixty three percent reported wages increasing in the past three month, unchanged from October’s survey.

“The results of the January 2023 NABE Business Conditions Survey indicate widespread concern about entering a recession this year,” Coronado said. More than 50% of respondents believe there is a chance of a recession in the next year, at least 50 percent.

The January survey was completed by 60 NABE members between Jan. 4-11. This reflects fourth-quarter 2022 results, and provides a near term outlook.

Tough Business Environment

NABE’s survey revealed that many businesses are experiencing difficult times. Respondents said that higher interest rates, as well as costs, are the most serious risks to their economic outlooks.

Profit margins were still under pressure. They fell to negative 25 Net Rising Index in January from negative 10 NRI October. NRI is the percentage of panelists reporting positive results minus those reporting declining ones.

In mid-2020 surveys, profit margins were last at this level. The profit margin outlook for next three months has improved from negative 17 to negative 7.

In the most recent survey, the NRI for wages rose from 55 to 63 as respondents reported falling wages. NRIs for anticipated wage costs for the next three-months also increased from 43 to 63 in October to 63 by January.

“The survey results reveal an unevenness across indicators,” According to the NABE post, Carlos Herrera, NABE Business Conditions Survey chair, is chief economist at Coca-Cola North America.

“Wages rose at a majority of respondents’ firms in the last three months of 2022, and more firms added workers than reduced headcounts. But far more firms than in the past three years reported falling profit margins.”

Layoffs in 2023

According to other surveys, many companies are planning to lay off employees this year. According to a Resumebuilder.com survey 1000 business leaders polled in December 2023 indicated that 61 percent of them expect their businesses to lay off employees in 2023.

57% of respondents expect that layoffs will occur this year.

According to the survey, 70% of companies plan to implement a hiring freeze in 2018. 74% of leaders agreed that it would be easier for poor performers to be fired in 2023 because of employees losing their jobs. “bargaining power.”

Google’s parent company Alphabet recently announced that it would eliminate 12,000 jobs. Microsoft will cut 10,000 jobs or approximately 4.5 per cent of its global workforce. Amazon announced earlier this month 18,000 layoffs, including terminations that occurred in November.

Salesforce intends to reduce its workforce of 80,000 by 10%. Goldman Sachs will spend $275million to terminate 3,200 jobs.

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