AI Driving Holiday Layoffs & Verizon’s Massive Cuts

Additional Resources

• 3 in 10 Companies Will Lay Off Employees During the Holidays
• Verizon Layoffs
• The Gig Economy- A Tale of Two Labor Markets

Transcript

Pete Newsome: 0:00

Happy Friday, everyone. Today’s job market headlines provide insight into the gig economy and confirmation of a major company layoff. But first, three in ten companies say they’ll cut jobs during the holidays, which I find difficult to believe. It’s from a new resume.org survey where 31% of the companies said that between mid-November and New Year’s they expect to conduct layoffs. And we know it’s a bad job market, but it’s not that bad. So this number just seems excessive to me. Although, even if it is inflated, the trend is real. Companies are taking action. They’re front loading cuts before January. The top reasons given were cost cutting ahead of Q1, avoiding bonuses. It’s awful individuals doing that if that’s actually happening, and avoiding PTO payouts. Same thing there. The other drivers were economic pressures, company performance, AI and automation.

0:56

Here comes that again, and this just overall restructuring. 69% of the companies surveyed said they plan to use AI to identify which roles should be cut. That’s a new one. I haven’t heard that before, but 69%, and that’s an overwhelming number for sure. And then on executive treatment, 82% of the companies surveyed said that executives will still receive bonuses. So cutting people, still paying out the execs. Yeah, that’s not new. We’ve seen that happening over and over many, many times over the years. 73% of the managers surveyed feel that laying off employees during the holidays is unethical. So how’s that for a contradiction? It’s unethical, but we’re going to do it anyway. So at least seeing that gives me some hope. Maybe this won’t actually happen. And again, one out of three companies laying people off right now in that time frame, that that just it just seems like it’s it’s it’s inflated to me. So we’ll I’ll be paying close attention to layoff announcements and we’ll continue to report on that for sure.

2:05

Next, ADP just published a report called The Gig Economy: A Tale of Two Labor Markets. And it was a result of studying 26 million workers, and they break down contingent labor in two ways. One is W-2 employees, what I consider to be contract employees, temporary employees, all the same thing, and then independent contractors who file taxes using a 10 uh Form 1099. Now, they call that the gig economy. They lump it together. I consider gig work to be independent contract work. I don’t consider W-2 temporary labor to be gig work because they’re actual employees of the staffing companies that they work for. And in many cases, it lasts a long, long time. So I do differentiate that, but it doesn’t uh detract from some of the findings that stood out to me really interesting that W-2 temps earn a median of $15 an hour, where independent contractors earn $25 an hour.

3:10

Now, the reason for that is because if you are an independent contractor, you have unique marketable skill sets, typically. So that’s why you’re going to go that route versus just being a potential short-term temporary worker somewhere. Also, what I found interesting is that there’s a lot fewer hours in both cases. Temporary employees and independent contractors work about 20 hours a week, which is half of what a typical traditional full-time employee puts in. Now that is not reflected at all in contract staffing. So I’m surprised to see those numbers. It just tells me that the type of staffing that I, my company does, which is white-collar corporate jobs for the most part, they’re almost all working a typical work week, a 40-hour work week, or close to it. So there’s a lot of short-term work. I think a lot of blue-collar, uh just true temporary service work is out there that I’m not privy to.

4:08

So that’s why it was a surprise to me because when I think of contract employment as a whole, it more often than not resembles what a full-time worker would do. And then the other thing that jumped out at me was that these numbers are growing for independent contractors. In 2019, their sample contained an average of 300,000 independent contractors. And by 2024, so just five years later, that number is 450,000, so a 50% increase in the number of independent contractors. So that’s a trend that’s going to continue. It’s a report worth checking out if you’re a geek and who likes this kind of data about the uh staffing and labor industry. But in the final headline today, Verizon’s rumored layoff has been confirmed. They’re cutting more than 13,000 jobs, which is roughly 20% of its non-union management workforce. Verizon uh also reported weak subscriber numbers, so that’s probably why it’s happening. Um, and they plan to scale back outsource labor.

5:13

Their new CEO said that the company needs to simplify operations and improve customer experience. I don’t know how you improve customer experience by laying off 20% of your staff, but that’s Verizons to figure out. I wish the best for all these folks who, uh, through no fault of their own find are finding themselves suddenly unemployed. And in closing today, your fun fact the phrase taking the rap comes from an old job that existed a long time ago called a rapper. It was someone who was paid to knock on doors to wake people up in the morning so they could get to work. And if they woke someone up at the wrong time, too late, they would literally get wrapped on the knuckles.

5:56

So, how’s that for job feedback if you don’t do your job? You know, we get yelled at today. You know, there’s a lot of um workers who get really emotional about being uh criticized at all about their work, but wrapped on the knuckles, yeah, that’s a whole different level. I don’t think that would fly today at all. So there are your headlines for today. Thank you for listening. Have a great weekend. Please like, subscribe, share with anyone who you think might be interested. And I look forward to talking to you next week.