- “Higher unemployment” path assumes 7.5 percent unemployment during 2023 and 2024″- according to Brookings.edu study.
The prospect of layoffs in 2024 is a matter of considerable interest for both businesses and employees. As we steer through the intricacies of the global economy, numerous factors could shape the frequency and nature of layoffs. So far we have had 1033 tech companies w/ layoffs with a total 238329 employees laid off in 2023 alone
A primary factor that could influence layoffs is the ongoing battle against inflation. Companies often resort to cost-cutting measures, which can unfortunately lead to job losses, in response to rising interest rates, a common strategy to curb inflation.
A study from the Brookings Institution anticipates that a high unemployment rate will be essential to combat inflation. This could potentially trigger an uptick in layoffs in the coming years.
the quarterly path of unemployment underlying the 2022 IMF Article IV Staff Report. Quarterly forecasts
are allocated to the second month of each quarter and a monthly path is obtained via interpolation.
“Higher unemployment” path assumes 7.5 percent unemployment during 2023 and 2024 as suggested by
Summers (2022b). In this scenario, the unemployment rate rises linearly from its July 2022 level to 7.5
percent in January 2023 and remains at that level through December 2024. Horizontal dashes show 2.5
percent target for median CPI based on 2 percent PCE target reported on Federal Reserve Bank of
Atlanta Underlying Inflation Dashboard.” Image Credit: Brookings.edu
Jason Furman, former chairman of the White House Council of Economic Advisers under former President Obama, suggests that the US would require an average unemployment rate of approximately 6.5% in 2023 and 2024 to achieve desired inflation levels. This would reverse the current trend where companies are actively seeking to recruit workers, not let them go.
Layoffs and AI
Technological advancements and societal trends that are too significant to overlook or postpone are areas where we can anticipate continued innovation and investment. As we gain a deeper understanding of technology – artificial intelligence (AI) being a prime example – we also comprehend what it is not. In 2024, this will lead to fresh perspectives on what defines us as humans – a theme echoed in this year’s predictions.
Generative AI is one such area where we can expect substantial growth. Generative AI empowers nearly every organization to create and intelligently automate customer experiences as well as internal operations. This could potentially lead to job creation in areas necessitating a human touch, such as emotional intelligence, communication, interpersonal problem-solving, high-level strategy, and thought leadership.
While potential layoffs due to economic factors may pose challenges ahead, there are also opportunities for growth and innovation. It is crucial for businesses and employees alike to remain adaptable and resilient in the face of these changes. The future may be uncertain, but it is also brimming with potential.
Sources:
Brookings.edu – study
Layoffs, High Unemployment Coming to Lower Inflation Over Next 2 Years – Business Insider
The 10 Biggest Business Trends For 2024 Everyone Must Be Ready … – Forbes
What Will the Workplace Look Like in 2025? – SHRM
