Many experts predicted that 2024 would be a year for layoffs, and they were right. We’ve already seen major tech corporations and automobile giants lay off thousands of workers – and former Home Depot CEO Bob Nardelli is blaming the fad on inflation and wage increases. Here’s what you need to know and how you can prepare.
Who Is Bob Nardelli?
Bob Nardelli is a 75-year-old businessman who spent most of his career at General Electric before being named CEO of The Home Depot (2000-07), Chrysler (2007-09), and Freedom Group (2010-12). Today, he operates XLR-8 LLC, an investment and advisory firm.
Nardelli appeared in a segment on Fox Business last month, where he was asked about the difference between shrinkflation and inflation. In his response, he discussed how inflation and wage increases were causing an influx of layoffs and job losses across the country.
Warns Of Tremendous Shift Of Employment
“We’re seeing a tremendous shift of employment out there,” Nardelli said – claiming that Joe Biden’s handling of the economy has put both employers and employees in a difficult position.
He went on to highlight some of the most shocking layoffs reported so far this year, including UPS (12,000 employees) and tech companies (40,000 employees). He also mentioned Ford’s layoffs (due to the rise of EVs) and GM’s layoffs (due to the Cruise program).
Doesn’t See America Sidestepping Recession
While many people are optimistic that things might turn around in the near future, Nardelli finds himself on the opposite side of that spectrum – alluding to the high inflation and interest rates across the country.
“I think we’re still in an inflationary period, and I think we’re not going to see a soft landing, would be my prediction,” he told Fox Business – adding that he hopes he’s wrong.
Persistent Inflation: Rising Higher Than Expected
In January 2021, the Biden Administration inherited an inflation rate of around 1.4%. By December of that year, it was as high as 7.0% and increased to 9.1% by June 2022. Since May 2023, the inflation rate has hovered between 3.0% and 4.0%.
While inflation has improved over the past year, it’s still nowhere near what it was under the Obama and Trump Administrations – when it hovered between 1.0% and 2.0%. In fact, it increased from 3.1% in January to 3.2% in February.
Wage Increases: Causing Companies To Slim Down
High inflation rates aren’t the only thing plaguing Americans today. While wage increases might sound like a good thing, they usually do more harm than good, especially since companies are already battling low profit margins.
Wages were 5% higher in February 2024 than they were in February 2023, but companies are finding it hard to keep up—often electing to lay people off instead of giving them a raise. Employers have to cut costs somehow, and it’s leaving a lot of people without a job.
Stellantis Lays Off Hundreds Of Temporary Workers
Stellantis, a global automaker that designs, manufactures, and sells vehicles, components, and production systems, is preparing to launch more electric vehicles in the US this year. Unfortunately, that news is being coupled with several rounds of layoffs.
Last week, the company announced it was relieving 400 non-salaried workers in the US and another 2,500 or so in Italy. According to Reuters, the move was an attempt to cut costs and boost efficiency.
UPS Warns Of 12,000 Job Losses This Year
In January, UPS – one of the world’s premier package delivery companies – announced that it would be laying off more than 12,000 employees in an effort to ‘align resources for 2024.’ The company expects to save nearly $1 billion as a result.
“I want to thank UPSers for providing the best on-time performance of any carrier for the sixth year in a row,” CEO Carole Tomé said on a company earnings call. The layoff represents nearly 3% of the company’s workforce, but won’t affect unioned workers.
General Motors Laying Off 1,300 Michigan Workers
In December 2023, General Motors – one of the world’s largest motor-vehicle manufacturers – announced that it would be laying off 1,300 workers at two Michigan plants in the first quarter of 2024.
Nearly 950 of those employees were working out of the Orion Assembly facility – where they build the Chevy Bolt – and another 360 were working out of the Lansing Grand River Assembly/Stamping plant (where they make parts for the Camaro). The Chevy Bolt was discontinued, and the Camaro will be discontinued after 2024.
More Than 46,000 Tech Employees Laid Off
Tech companies are driving the majority of the layoffs so far in 2024. Through the first two months (January and February), tech companies have laid off more than 46,000 employees, with the most recent surge coming from Expedia, Sony, and Bumble.
Amazon, Audible, Google, Apple, YouTube, TikTok, Microsoft, and Paypal all announced layoffs in January. Uber, Grammarly, Instacart, and Electronic Arts were added to the list in February, while IBM joined the trend in March.
Could Power Be Shifting Back To The Employer?
The worker shortages in 2021 and 2022 gave employees a lot of power over their employers, but that power seems to be shifting now that more workers are desperate for work. Just look at the unemployment rate, which is currently 3.9%—the highest since January 2022.
According to Indeed, job searches increased by 13% between December 2023 and January 2024, but job listings only increased 5%. With job layoffs becoming increasingly common for thousands of Americans, here are three things you can do to prepare yourself for the worst-case scenario.
3. Don’t Give Up On Indeed and LinkedIn
One of the biggest mistakes people make when they get a job is they stop looking for a new one. It doesn’t matter how happy or unhappy you are at your current job, you should always be looking for something better – you never know what you might find.
That said, we recommend browsing the internet (Indeed, LinkedIn) to see what’s out there—just in case! You should also update your resume often. And if you receive an offer but aren’t interested in accepting it, you have all the power in the world to decline it!
2. Attend Industry Events and Build Connections
People often underestimate the benefits of industry events—not just when looking for a job but for networking in general. You never know who you might meet, and they could be looking for someone like you to join their team.
If you build connections and network while you still have a job, then you’ll have a growing list of people who might be able to help you when/if you lose your job. That type of security is priceless, especially when it’s needed.
1. Start Saving Money Now – Anything Counts!
This one goes without saying, but start saving money while you can. There’s nothing worse than losing your job and not having anything to show for it. Instead, try to have at least a few months of income stashed away.
The more money you have stashed away, the more time you’ll have to find a job when you lose one. This can help you reduce the amount of stress in your life and give you the peace of mind to come back better than ever!
