As the year draws to a close, many Americans are immersed in the familiar rituals of holiday preparation—digging out scarves, indulging in Christmas cookies, and relishing gatherings with loved ones. However, for some of the nation’s major employers, the holiday season appears to be a time for corporate restructuring.
This year has witnessed a wave of layoffs during the festive season, with industries such as media, tech, and finance particularly affected. Renowned companies like Ernst & Young, Hasbro, and Spotify have recently announced layoffs, and social media feeds are flooded with posts from individuals discussing their recent workforce reduction experiences.
While layoffs are challenging for employees at any time, the holiday season can intensify the difficulty. Budgets are often stretched thin during this period, and job hunting amidst the festivities can feel especially daunting. The question arises: Why do companies choose the holiday season for workforce downsizing?
Contrary to popular perception, data and experts suggest that the holiday season may not be the primary hotspot for layoffs. Challenger, Gray & Christmas, Inc., a career consulting firm, has meticulously tracked layoffs across various companies for years. Their data, spanning from 1993 to 2023, indicates that January historically witnesses the highest number of layoffs. In recent years, April and May have emerged as the most common months for layoffs, with April averaging over 100,000 monthly layoffs between 2013 and 2023.
Surprisingly, December’s monthly average for the past decade is less than 37,000, challenging the notion that layoffs spike during the holiday season. In fact, the data reveals that this past November experienced a 41% decrease in job cuts compared to the same month the previous year.
Experts, including Nick Bunker, the director of economic research at Indeed, emphasize that despite headlines suggesting increased layoffs, statistics indicate a low layoff rate by historical standards. The latest Job Openings and Labor Turnover report from the Labor Department, analyzing October data, revealed relatively unchanged layoff and discharge figures compared to the previous year.
Bunker notes that the perception of increased layoffs during December may stem from specific companies making significant changes, capturing attention through media headlines. The prominence of media and tech companies in these headlines can contribute to the perception of widespread layoffs, even if the data suggests otherwise.
Ultimately, the data suggests that December does not witness a disproportionate number of layoffs compared to other months in recent years. Instead, companies adjust their staffing levels based on internal needs and strategic decisions, rather than adhering to a seasonal trend. Despite attention-grabbing headlines in certain industries, the overall strength of the economy remains robust, assuring observers that these layoffs may be more industry-specific and seasonal, rather than indicative of broader economic weakness.