Microsoft, Paramount latest to unveil lay off intentions

Microsoft (MSFT) and Paramount (PARA) are the latest companies announcing 2024 layoffs in memos to employees. Yahoo Finance's Josh Lipton and Julie Hyman talk about the balance in the job market as more corporations seek to implement job cuts.

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JOSH LIPTON: Microsoft reportedly telling employees it will cut nearly 2,000 2 roles across Activision Blizzard and Xbox just months after it closed its merger with the video game company. And Paramount CEO Bob Bakish indicated layoffs would be coming in a memo to employees. So this is certainly a trend, Julie, we've seen making headlines, this trend of layoffs, for sure in tech, specifically.

And actually, The Journal has kind of this running list of companies that have already announced layoffs this year within tech. And already this year, Google, eBay, Rent the Runway, Wayfair, Xerox have announced thousands of layoffs, collectively at least. We actually spoke recently to LinkedIn economist kind of about this trend, specifically just in tech. And he told us what he's seeing in terms of his platform. Take a listen to that.

KORY KANTENGA: Like a lot of things in the US economy, layoffs are seasonal. They primarily happen in January. The second thing to keep in mind is that overall, when we look at the data both at LinkedIn and at the Bureau of Labor Statistics, the labor market seems pretty steady and stable.

JOSH LIPTON: So it was interesting, at least his take. And again, he's looking at his platform and across the economy. He was not sounding the alarm. At least when it comes to tech, he was kind of arguing that seasonality was playing a real variable when it comes to the layoffs we were seeing in this sector. And I think there's probably some other trends, too. You can talk about the post-pandemic adjustments these companies are making. The boom of AI I'm sure has a lot of them kind of reconsidering who they hire, when they hire, where to commit resources. But it's a trend, and we keep watching it.

JULIE HYMAN: Yeah. And, you know, reallocation of resources to your point, I think, is a big part of this. You had IBM as one of the companies saying over the past 24 hours that it's going to cut some percentage of jobs this year in the low single digits. But that it actually because of other additions is going to have the same number of employees at year's end as they do now.

So you have to look at the net numbers, obviously, when you're talking about layoffs. You can't just look at the numbers that are being cut without the numbers that are also being hired. And if you look kind of zoom out and look at what we have seen in the job market, first of all, we also got weekly jobless claims today. We are seeing those tick higher on the week-over-week basis and on the four-week rolling basis.

But if you look at the bigger tally of layoffs from the JOLTS report that comes out, you've definitely seen that we're not back to levels where we were. Yes, there was a spike during the pandemic in layoffs. There was also sort of not a spike but a surge during the financial crisis. But we're not near those levels at this point in terms of those layoffs.

JOSH LIPTON: Yeah. I know with tech, too, you know, you do hear people asking the question, could it be kind of foreshadowing what's coming? Is it kind of maybe a canary in the coal mine? But to your point, right now, I mean, broadly, this labor market is still sturdy. I mean, it's sub-4-- sub-4% unemployment, wage is growing.

JULIE HYMAN: Yeah. So it doesn't feel that way yet.