With inflation hitting a 40-year record high at 8.6%, experts from various fields continue to analyze its impact on their respective services or products. From increasing costs at the grocery store and the price at the pump to high rent vs. high mortgage rates, inflation has infiltrated all areas of daily lives for the foreseeable future. Without any exception, the job sector has also been affected significantly.
The impact of the Ukraine crisis, four-decade high inflation, and increasing interest rates have resulted in forecast cuts by companies such as Snap Inc and Microsoft, while others like Meta Platforms Inc have slowed hiring to rein in costs.
Fintech companies also announced 268% more job cuts in May than in the first four months of 2022.
According to a recent Deloitte report called the 2022 Technology Industry Outlook, “To enable the next wave of growth, technology companies should rededicate their efforts to improving transparency, agility, collaboration, sustainability, and digital innovation.”
Tech companies are feeling the stroke of recent inflation and market volatility, which impacts the growth and funding outlook. Despite record funding, various organizations are laying off workers, which are large numbers, often reaching 25% of a company’s workforce at a time. As per Crunchbase, companies like Netflix, Better, and Robinhood have cut jobs this month. Already in 2022, more than 21,000 tech workers have been laid off from tech companies.
University of Michigan economist John Leahy remarked that the Federal Reserve displayed “increasing urgency in both word and deed,” when it raised its benchmark interest rate by three-quarters of a point—the highest rate hike since 1994.
Incomes Continue Growth, Low Employment
Still, more than half of consumers in the U.S. anticipate their incomes to surge by the forthcoming year, which is consistent with historic low unemployment and a strong labor market. Expected wage gains lowered from 1.8% in May to an average of 1.1% in June, however, many workers continue to be able to choose between multiple opportunities and have more leverage in the job market than in previous years before the pandemic.
Deloitte suggests that companies build on the growth strategies of the pandemic, during which many companies built out systems to allow for remote work, cloud-hosted secure work systems for a distributed workforce, and creating the supply chains of the future. It’s that last bit that inspires some strategic observation. It is expected that the tech companies are able to address these challenges internally while creating solutions for the economy to address similar issues will fare the best.