BY IRINA IVANOVA
UPDATED ON: MARCH 2, 2023 / 5:04 PM / MONEYWATCH
Layoffs have spiked in recent months, with technology companies that flourished during the pandemic cutting tens of thousands of jobs.
So where are all those laid-off workers going? Hiring company ZipRecruiter recently ran a survey to answer the question, and the results suggest many of those who lost their jobs are doing just fine. Of the employees who were laid off in December or January, just over half have already found other work, while another quarter said they have a job offer in hand, according to the poll of 2,000 people taken in late January.
Workers who were laid off from jobs in advertising, the auto industry and transportation were most likely to have received a job offer since their layoff. And somewhat surprisingly, 80% of workers who found new employment after getting laid off said they didn't have to take a pay cut.
"Typically after a layoff, people struggle to find new work, and often they're forced to take new jobs at lower pay," said Julia Pollak, ZipRecruiter's chief economist. "We were surprised at how many people in the survey said they are not worse off, but actually better off."
Laid-off workers who were offered severance — 1 in 3 respondents — said the money lasted them an average of roughly 16 weeks — longer than the median length of unemployment today, which is just over nine weeks.
The findings also shed light on one puzzling aspect of the U.S. economy today: Despite the alarming headlines about layoffs, unemployment around the U.S. isn't rising.
Despite reports of layoffs, few people apply for jobless aid
Initial unemployment claims — a proxy for layoffs — have fallen since last summer.
Indeed, the job market remains unusually tight. Before the pandemic, it was common for about 1.6 million workers to be laid off or fired every month; now, that number is down to 1.4 million, a sign of how eager companies are to retain workers. The nation's unemployment rate, 3.4%, is the lowest since 1969, while hiring remains robust despite the economy slowing down. Jobless claims have barely budged despite the flurry of layoffs.
"Layoffs and firings since the pandemic recovery have been well below the best months for job stability before the pandemic," Pollak said.
The companies that have laid off workers are concentrated in a few industries. ZipRecruiter's data shows that job cuts were mostly in finance, construction, technology and real estate, relative to their share of the overall workforce. Within each industry, workers in customer service, sales, IT and operations were more likely to be laid off than other functions.
Industries most and least affected by layoffs
To be sure, a layoff can be a devastating experience for an individual. Research shows people who suddenly lose their livelihood are more prone to depression and suicide. Against that backdrop, it appears the current spate of layoffs is relatively benign.
"Layoffs are bad, but how bad depends on the macroeconomic environment," Pollak said. "In this very interesting labor market, some of the workers who are being laid off are being pushed into the job market at a time when conditions are still fairly favorable — and some are learning that their market value is higher than they even knew."
The layoffs announced of late have been geographically dispersed, meaning newly unemployed workers are not all competing with one another to get hired and may find a new job more easily in previous downturns.
"Workers who work in finance and technology often live in places that have very diversified economies, so that's not the only show in town," Pollak told CBS MoneyWatch.
That could help explain something else ZipRecruiter found: Most of the workers it polled showed little anger at company that sent them packing, saying they would return to work there if given the chance.
Forgive and forget?
Laid-off workers who would return to the company that sacked them, by industry.
"I have noticed a pattern in these layoff announcements where CEOs have taken great pains to apologize, to say they're taking responsibility, that they're as devastated as anybody," Pollak said. "I think people feel that there's some empathy and some respect shown toward them."
Layoffs have "definitely become a refined art these days — with a lot of consulting going on behind the scenes, best practices, testing happening," she added. "News spreads fast these days, and employers want to be careful about their 'employer brand.'"