Concerns about a “white collar recession” grew Tuesday after Goldman Sachs began to lay off workers as part of a plan to cut 3,200 jobs in an effort to cut costs.
Goldman Sachs is just the latest firm to reduce its size in recent months. Morgan Stanley announced that it would cut two percent of its staff in December, Amazon plans to cut over 18,000 jobs, and Salesforce announced it would cut ten percent of its workforce and close some offices last week.
While white collar workers were less affected by the COVID-19 pandemic lock-downs than their blue collar counterparts, many jobs were simply done remote instead of being cut, professionals are now bearing the brunt of the economic headwinds America faces.
Goldman’s layoffs represent one of its biggest yet since the 2008 financial crisis.
“26,000 more layoffs announced today alone… from Amazon & Salesforce no less (they both have cash to weather this storm, but are taking the medicine) The white collar recession is very real & it will increase FB, Uber, MSFT, Google & Apple will all announce in Q1 I predict,” investor Jason Calacanis tweeted.
Vance Ginn, president of a consulting firm and a senior fellow at Young Americans for Liberty, tweeted “As White-Collar Layoffs Rise, Blue-Collar Resilience Faces Test in 2023 via @WSJ. My take is job losses will rise rapidly during the ongoing #recession and will get worse in 2023 as the recession deepens with elevated #inflation and #interestrates.”
Concerns about a recession have been brewing for months, as the Federal Reserve raises interest rates to combat high inflation and makes borrowing harder. The Federal Reserve’s actions aim to slow down the economy in order to drive down prices.
In 2022, the U.S. briefly entered a technical recession. With the stock market posting record losses last year and turmoil aboard, many analysts predict the worst has yet to come.