Dow and Home Depot Cut Jobs as Layoff Stigma Grows

Additional Resources

• CBS News on Dow Cutting 4.5K Jobs
• Unemployment Insurance Weekly Claims Report
• Chicago Fed’s Labor Market Forecast
• The New Resume Taboo

Transcript

Pete Newsome: 0:00

Welcome to Cornering the Job Market for Thursday, January 29th. I’m Pete Newsome, and today’s headlines, unfortunately, include more job cuts from major employers, Dow Chemical and Home Depot in particular. Dow announced that they’re going to slash 4,500 jobs, which is about 12% of their global workforce. It’s not the first one they’ve done recently. They’ve cut about 9,000 jobs over the past three years. And here’s what drives employees crazy. It’s bad enough to lose your job. But when you see some of the numbers that are behind this, they expect one-time costs of about $1.1 billion, and they’ll pay between $600 and $800 million in severance. But they’re also expecting a $2 billion boost to profit as a result of this. Now their stock didn’t respond to that. Well, they were down a couple points as of the time of recording this morning. So we’ll see what happens there. And they’re attributing this to AI. So here we go again, where a company is saying that AI is the reason for this move and they’re going to rely on it more. They’re calling it transform to outperform. I mean, that’s probably another insult to injury. Do we really need a catchy phrase that rhymes around a job cut when people are losing their jobs? Let’s at least treat this with some respect. But listen, I get it too. I mean, a company has to take advantage of what AI can offer right now.

1:28

And this is the dilemma that we’re going to see continue to get worse. I don’t know how it’s going to get better. I was going to, I was naturally inclined to say before it gets better. I just don’t see how it’s going to get better with AI only improving. And so that’s what they claim to be the driver, but a lot of people will be skeptical and say, nope, that’s just what companies are saying is an excuse because it gives them a pass and it indicates that they’re being innovative and they’ll get credit for that. But it’s it’s just a bad week for big companies. So we’ve seen Amazon, UPS, Pinterest, and now Dow and Home Depot. Home Depot announced that they’re gonna cut 800 jobs. And they’re all corporate. So while they didn’t specifically say AI, at least I didn’t see that. That’s my conclusion. That’s sort of the default conclusion I see. Anytime a company’s doing well on paper but announcing cuts, right, what else could it be? Um it’s just not a good situation. So that is the biggest headline today. Also, weekly unemployment claims came out. Now, the official numbers look fine. The claims came in at 209,000, which was down a thousand from the previous week. So that’s a positive trend. Now, here we go again with the games where the numbers from the previous week were revised up by 10,000. And that means the four-week average has gone up by about 2200. So we’re heading in the wrong direction there, although the numbers just haven’t moved that much. Now, reality is we haven’t seen these recent cuts kick in. That won’t happen for a while.

3:18

So based on what I’m seeing, I won’t be surprised if these numbers start to get worse as time goes on. And this is only what we see from the big companies. And it’s worth noting, SMBs or small to medium businesses don’t publicize their job cuts. These things happen quietly. So do you not think that they’re doing the same thing the big companies are doing? I certainly do. Companies that I know of, the company owners that I speak with on a regular basis, with that exception, they are trying to figure out how to gain efficiencies through AI. I came into this year feeling positive, but this week has been an absolute killer. I just don’t know where it’s going to head next. Back to the unemployment claims. Regionally, there didn’t seem to be any consistent theme there. California was the biggest loser with 5,500 new claims. New York seems to be the biggest winner with a decrease in claims, initial claims specifically, of around 9,500, and then Georgia also decreased by around 5,700. So Northeast, Southeast, Southwest not doing as well, but that was just California. They’re so big, a 5,500 number, quite frankly, that isn’t as meaningful there as it would be in a much smaller state. So from a year-over-year standpoint, no real movement in the numbers there either. We’re seeing those essentially flat, I mean slightly better with continuing claims, but not much of a story there.

4:44

Now, speaking of year over year, what also came out today was the Chicago Feds labor market indicators. This is a forecast specifically of what they believe January unemployment will be. And they’re forecasting 4.35%. They also forecast the range, which is from 4.21% on the optimistic side to as high as 4.49%. Now, if we assume the 4.35, that is a slight improvement, very slight from December’s 4.38, but not at all good when you compare it to January last year, the actual number of 4.02. So significantly less unemployment last year than we’re expected to see in January this year. So that is a story absolutely worth paying attention to. And with these announcements this week, I don’t see it getting better, unfortunately. I keep saying that word today. That’s the theme. Today is unfortunate. This week has been unfortunate. We’ll shift gears entirely for the final story today, which is about the stigma of layoffs. Monster published an article that they called The New Resume Taboo. Why one in three workers would hide a layoff. And what it seems from this is many are still embarrassed. 54% said they’re embarrassed socially about discussing being laid off. And I get that. Losing your job is never fun. It’s not pleasant. It yeah, it’s embarrassing. But context matters. And in this time more than ever, with AI, context matters a lot. When you see an entire department let go, that’s not something you can take personally, or no one would associate you and your performance with that.

6:30

And so if you’re a job seeker, you need to figure out a way to tell that story. That’s a whole different conversation. But although traditional cover letters aren’t used widely anymore, there’s plenty of opportunity, and you need to find an opportunity to do this if you are unintentionally on the job market because you’ve been laid off to get that message across. The report showed that 33% would hide being laid off on their resume. And my thought there is just know that you’re going to be asked about anything that it is on, or maybe appears to be a gap on your resume. So just be prepared to talk through it. I am all for using a resume as a way to get in the door. But you can’t fabricate things either, because if if you get in the door because of a story that was untrue and you’re unable to defend it, well, that’s a waste of everyone’s time and it’s going to sane your reputation. So just know that you can position things a lot of different ways on a resume, and I encourage creativity in that regard for sure. Um, you’ve got to stand out somehow, you’ve got to get to that interview. But just know that you have to be able to talk through it. That’s a really important thing. Now, the survey also asked whether the stigma is improving, and 69% said the stigma around layoffs has not improved, and 24% say it’s worse. I was surprised to see that. I do not think it’s gotten worse. I think, well, let me say this: it’s certainly not going to be worse now. I would like to see them redo that survey a month or two from now because just the announcements this week alone tell me that, well, a lot of people are going to be in this boat.

8:12

And when that boat is crowded, the stigma should be non-existent. If there’s a time where nobody thinks layoffs are happening, yes, I could see it being more of a concern then. But listen, right now, if you’re one of those who said you were embarrassed by it or would want to hide it, shift your thinking on that. That’s my recommendation there. And then finally, the uh survey talked about severance expectations quickly. 10% said that two to four weeks is uh acceptable. 35% who took the survey said severance should be based on tenure, and 9% expect more than six months. So, you guys who are expected more than six months, I think you’re gonna have to get lucky with that. I don’t believe that that is the norm. There are exceptions to every rule, but um I wouldn’t expect it. That’s that’s for sure. Those are your headlines for today. Thank you for listening as always. But before we go, here is a fun fact. This doesn’t seem like a day for fun. So here’s a fact, a work-related fact, I’ll call it that. The word deadline originally referred to a physical line in Civil War prisons. If a prisoner stepped over it, they were shot. Wow. So that I probably should have considered the fun fact we picked out for today before getting to the headlines. We did that in reverse order. So um, lesson learned. I don’t really know what to say to make that positive.

9:38

But look, I’m gonna share the news. I’m gonna share the facts and and trends of the job market, whether it’s pleasant or not. I don’t get to control that. And um like like I I said before, I I did expect this year to be a lot better. So maybe we’re just getting all the bat out of the way. And I’ll look for some positive news. How about that? Tomorrow’s Friday, right? Yep, it is, and I will try to end the week on a good note. So thank you, everyone. Please like and subscribe, share with anyone you think might be interested. And I look forward to talking to you tomorrow.