GM Cuts Salaried Staff, Port Cargo Volume Expected to Rebound, Jobless Claims Rise
GM Cuts Salaried Staff
Auto giant General Motors has joined other U.S. companies ramping up layoffs at a time of rising costs and economic uncertainty, offering voluntary buyouts to most of its U.S. salaried staff. Announced job cuts at U.S.-based firms total more than 180,000 just in the early weeks of 2023.
In a letter sent Thursday to workers and published by several media outlets, GM CEO Mary Barra said the company would offer buyouts to most of its 58,000 U.S. white-collar employees, including all with at least five years’ tenure with the company. The buyouts follow GM’s announcement last week that it planned to lay off about 500 salaried workers worldwide.
GM did not disclose a target number for buyout package acceptances. The Detroit-based company is looking to trim $2 billion in structural costs over the next two years to help it “improve vehicle profitability and remain nimble in an increasingly competitive market,” a GM statement said.
GM’s plans were unveiled as outplacement firm Challenger, Gray & Christmas reported that U.S.-based employers announced 77,770 job cuts in February, down 24% from January’s 102,943 but 410% higher than those announced in February 2022.
February’s total is the highest for that month since 2009, when 186,350 layoffs were announced, and this year’s January-February total of 180,713 is far higher than the 34,309 cuts in the first two months of 2022. Most layoffs this year have occurred in technology, with others in healthcare, retail, financial services, media, auto manufacturing and other industrial categories.
“Certainly employers are paying attention to rate increase plans from the Fed,” Senior Vice President Andrew Challenger said in a statement, noting companies have generally reserved layoffs as a “last piece” of expense-reduction strategies in the face of rising costs. “Many have been planning for a downturn for months, cutting costs elsewhere.”
Port Cargo Volume May Rebound
After a slow February with one of the lowest traffic levels since the start of the pandemic, import cargo volume at U.S. ports is set to bounce back starting this month, according to the latest monthly tracking by the National Retail Federation and consulting firm Hackett Associates.
“There are many uncertainties about the economy, but we expect imports to show modest gains over the next several months,” Jonathan Gold, the retail trade group’s vice president for supply chain and customs policy, said in a statement Wednesday.
The trade group and Hackett Associates are now expecting imports at container ports to climb starting this month and at least through mid-summer, while remaining below year-earlier levels. Their forecast predicts U.S. ports in March will handle 1.74 million twenty-foot equivalent units (TEU), the accepted container volume metric, up from an estimated 1.56 million TEU in February.
“Growth is a positive sign, but levels are still below normal and retailers will remain cautious as they work to keep inventories in line with consumer demand,” Gold said. The NRF and Hackett Associates said February’s port container numbers dropped about 13.6% from January and declined by an unusually steep 26.2% from a year earlier.
“Retailers are maintaining reduced inventories in anticipation of rebuilding with new seasonal stock once they have a clearer take on expected levels of consumer spending,” Hackett Associates founder Ben Hackett said in the NRF statement. “While import volumes remain low, the tight labor market and strong wages are helping consumers absorb the impact of inflation and continue to spend.”
Jobless Claims Increase
Initial claims for unemployment insurance totaled 211,000 for the week ended March 4, up 21,000 or around 10% from the prior week, the Labor Department reported Thursday. Initial claims remain low by historical standards despite a growing wave of U.S. layoffs, primarily at technology companies.
The four-week moving average for initial claims was 197,000, an increase of 4,000 from the previous week.
Continuing claims in all programs, tracked on a more delayed basis, totaled about 1.92 million for the week ended Feb. 18, down 38,441 from the prior week but slightly above the 1.91 million total in the comparable week of 2022.
The U.S. employment market generally remains robust, with employers in several industries still struggling to fill positions and the unemployment rate at a 50-year low of 3.4% as of January. Analysts will be watching in coming days for indicators including February unemployment and inflation numbers that could influence future Federal Reserve rate hikes, with implications for labor and other business costs.
Elgin Development Group
Lou Hirsch, CoStar
- March 10, 2023
Elgin Development Group
A Division of the Elgin Area Chamber
31 S. Grove Avenue, Elgin IL 60120