Following Andy Jassy’s letter to Amazon’s workforce yesterday, the Wall Street Journal published a story this morning that reported companies’ white-collar workforce has declined by 3.5% over the past three year. Certainly, some of this is related to the manic post-pandemic hiring binge, but technological shifts are undoubtedly playing a role.
New technologies like generative artificial intelligence are allowing companies to do more with less. But there’s more to this movement. From Amazon in Seattle to Bank of America in Charlotte, N.C., and at companies big and small everywhere in between, there’s a growing belief that having too many employees is itself an impediment. The message from many bosses: Anyone still on the payroll could be working harder.
The timing of workforce cuts is unusual, considering the relative success of the economy and corporate profits:
All of the shrinking turns on its head the usual cycle of hiring and firing. Companies often let go of workers in recessions, then staff up when the economy picks up. Yet the workforce cuts in recent years coincide with a surge in sales and profits, heralding a more fundamental shift in the way leaders evaluate their workforces. U.S. corporate profits rose to a record high at the end of last year, according to the Federal Reserve Bank of St. Louis.
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