Concerns about a “white-collar recession” rose on Tuesday after Goldman Sachs began laying off workers as part of a plan to cut 3,200 jobs in a bid to cut costs.
Goldman Sachs is just the latest company to downsize in recent months. Morgan Stanley announced it would cut 2% of its workforce in December, Amazon plans to cut more than 18,000 jobs, and Salesforce announced it would cut 10% of its workforce and close some offices last week.
While white-collar workers have been less affected by the COVID-19 pandemic lockdowns than their blue-collar counterparts, many jobs have simply been done remotely instead of being cut, professionals are now bearing the brunt of headwinds economic challenges facing America.
Goldman’s layoffs represent one of the largest since the 2008 financial crisis.
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“An additional 26,000 layoffs announced today alone… from Amazon and Salesforce no less (they both have the money to weather this storm, but are taking the medicine) The white collar recession is real and it will grow FB, Uber, MSFT, Google and Apple will all announce in Q1 I predict,” investor Jason Calacanis tweeted.
Vance Ginn, president of a consulting firm and senior fellow at Young Americans for Liberty, tweeted “As white collar layoffs rise, blue collar resilience faces a test in 2023 via @WSJ. I think job losses will increase rapidly during the current #recession and will worsen in 2023 as the recession deepens with #inflation and high #interest rates.”
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In October, Goldman Sachs CEO David Soloman said there was a “good chance” of a recession in 2023.
Worries of a recession have simmered for months as the Federal Reserve raises interest rates to fight high inflation and makes borrowing more difficult. The Federal Reserve’s actions are aimed at slowing the economy in order to drive down prices.
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In 2022, the United States briefly entered a technical recession. With the stock market posting record losses last year and turmoil on board, many analysts are predicting the worst is yet to come.