Twitch, the livestreaming platform owned by Amazon, said on Wednesday that it was laying off hundreds of workers, the latest in a number of companies announcing cuts in their workforce this week. But experts tell Newsweek that the job losses do not signal that mass layoffs are set to hit the U.S. economy in the immediate future.
This week, Amazon, investment firm BlackRock and language-learning business Duolingo instituted cutbacks. Twitch laid off 500 workers in what CEO Dan Clancy said was an effort to make the business more sustainable.
"We still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch," he said in a post on the company's website.
A BlackRock spokesperson confirmed to Newsweek that the company was cutting 3 percent of its global workforce, about 600 people.
In a note sent to employees on Wednesday that Amazon shared with Newsweek, Senior Vice President Mike Hopkins said that the company "will be eliminating several hundred roles across the Prime Video and Amazon MGM Studios organization."
Duolingo confirmed to Newsweek that at year's end, the company "off-boarded around 10% of our contractor workforce," according to a spokesperson.
"We are not able to share specific numbers. In some cases, this was because the contractor's project concluded, and in some cases, this was because the contractor's work was no longer needed due to changes in how we generate and share content between our 100+ language courses," the spokesperson added.
But economists warned against reading too much into the cuts.
"There will always be some background level of layoffs. The data we have are unequivocal that layoffs remain low and have fallen over the past six months or so," Michael Pearce, a lead economist at Oxford Economics, told Newsweek.
He pointed out that data such as jobless claims showed that layoffs were low. Applications for unemployment benefits fell by 18,000 in the week ending December 30, the lowest level since October, indicating a labor market that is seeing few layoffs, according to an analysis by Oxford Economics.
Labor economist Guy Berger told Newsweek that the reports of job losses this week were anecdotal and that there was little evidence that suggests mass layoffs are about to hit Americans soon.
"Layoffs are like extremely low or for most of 2023, have been extremely low by historical standards," said Berger, pointing to recent job opening data from the Bureau of Labor Statistics that showed that there was little firing happening as employers looked to keep their workers.
"I am pretty skeptical this is telling us that we are in the midst of a surge in layoffs, I think it's more that we're very attuned to isolated stories of layoffs that are tragedies for people experiencing them but are on a small scale."
Jobs numbers released last week showed that employers were still hiring as they added 216,000 jobs in December and the unemployment rate stayed at 3.7, according to the Bureau of Labor Statistics.
Evidence elsewhere also suggested that companies are still recruiting workers. Hiring across the country jumped by 5.5 percent in December from the previous month, according to data from the professional networking platform LinkedIn, the largest month-over-month increase over the past year.
Sectors that saw hiring jumps included technology, media and information, where recruitment jumped by nearly 10 percent, LinkedIn data showed.
Berger suggested that the economy may see some layoffs in the coming months but evidence points to limited job losses overall.
"My feeling is that we're going to discover in the coming year that probably, we continue to have these anecdotes about layoffs here and there," he said. "But the overall economy just keeps very gradually and moderately continuing in an expansionary mode and employment keeps very gradually going on."
On Wednesday, John Williams, president and CEO of Federal Reserve Bank of New York, shared a similarly optimistic view of the labor market and economy.
He said in a speech that he expected the U.S. economy to grow by about 1.25 percent in 2024, and that "things are looking very good" on the employment front.
Update 01/10/24, 5:17 p.m.: This article has been updated with comment from Duolingo and Williams.
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