Half of US Companies Looking to Slash Jobs: PwC Survey

Half of US Companies Looking to Slash Jobs: PwC Survey
Job seekers line up outside the New Hampshire Works employment security job center in Manchester, N.H., on May 10, 2021. (Mary Schwalm/AP Photo)
Tom Ozimek

As signs of a U.S. economic slowdown mount, about half of American companies are planning to cut jobs, even as business leaders fret about the difficulties of hiring and retaining talent, according to PricewaterhouseCoopers (PwC).

PwC’s most recent Pulse Survey indicates that half of the more than 700 U.S. executives responding to the survey said they plan to slash jobs.

“This comes as no surprise,” the company said in a statement. “After a frenzy of hiring and a tight labor market over the past few years, executives see the distinction between having people and having people with the right skills.”

Besides 50 percent of all respondents saying they’re reducing their overall headcount, 46 percent are dropping or reducing signing bonuses, and 44 percent are revoking job offers.

‘Cautious Optimism’

Overall, despite weaker economic signals and a broad array of business risks, business leaders expressed “cautious optimism” about their future prospects. Just over four-fifths are focusing their business strategy on growth and only 30 percent see recession as a “serious risk,” according to PwC.

The picture of what PwC described as U.S. businesses “walking a tightrope on talent” comes amid fears of a sharp economic downturn as persistently high inflation pressures the Federal Reserve to hold the course on aggressive monetary policy tightening.

A number of prominent economists have warned of a U.S. recession that could be long and severe, with economist Nouriel Roubini recently describing analysts’ predictions for a short and mild economic downturn as “delusional.”
Roubini told Bloomberg in a recent interview that he expects the United States to be hit by a “severe recession and a severe debt and financial crisis.”
Some analysts dismiss the outlook for a long and severe recession, with Bank of America Chief Economist Michael Gapen telling Fox News in a recent interview that he expects a “mild downturn.”
The recessionary drumbeat got louder last week as a key economic gauge from the Conference Board dropped for the fifth month in a row, weighed down by a slowing job market, weak manufacturing new orders, and deep consumer pessimism.

Small-Business Hiring Cools

America’s small businesses aren’t far behind their bigger peers in terms of slowing down on hiring.
About 45 percent of small-business owners in the United States are implementing hiring freezes because of soaring labor costs and high inflation, according to the Alignable July Hiring Report.

“This represents a significant hiring shift, and is largely a reaction to mounting labor costs, skyrocketing inflation, fears of a recession, and rising interest rates,” Alignable stated.

Reflecting a similar “talent tightrope” dynamic that was noted by PwC, the Alignable report showed that 51 percent of small-business employers are still trying to find workers to fill key posts.

By contrast, the Alignable survey found that just 4 percent of small businesses were planning to reduce staff.