Despite warnings from some financial advisers that we are headed into a recession, unemployment — one of the key indicators of a recession — remains low. The most recently available data from May 2022 indicates the current unemployment rate is 3.6 percent, close to the lowest it has been in 20 years. However, several big layoffs have made the news this year, with tech, real estate, and crypto being the hardest hit markets so far.
Here are some of the biggest layoffs we've seen so far in 2022, and what, if anything, the cuts may indicate.
Coinbase leaves approximately 1,100 employee in the cold amid a crypto winter.
The massive crypto sell-off came to roost at Coinbase, where around 18 percent of the full-time workforce learned on Tuesday, June 14, that they were out of a job. The crypto exchange, which went public in April 2021 and closed its first trading day at $328.28, has seen its stock value fall more than 80 percent as crypto prices have also taken a dramatic tumble.CEO Brian Armstrong cited the potential for a recession leading to a long and severe "crypto winter," and also conceded that the company grew "too fast" during the bull market of 2021.
Real estate layoffs in 2022 have included Redfin, Compass, Better.com, and Wells Fargo.
The mortgage industry is perhaps the heaviest hit with layoffs in 2022. Real estate companies Redfin and Compass both announced layoffs on June 14. The firms are reducing their workforces by 8 percent and 10 percent, respectively. The announcements are hardly a surprise with mortgage rates having nearly doubled since January, leading to a significant slowdown in demand.
In April, Better.com took a lot of flak for laying off 900 workers over Zoom and insulting many of those being let go. Wells Fargo also let go an undisclosed number of employees within its mortgage lending sector in April 2022.
Carvana laid off 2,500+ workers in a total fiasco.
Carvana's layoff made the news not only for the number of workers left in the dust — around 18 percent of the workforce, or 2,500 people —but the way they were given the news. Many of the affected employees reported to various news outlets that they were told they were losing their jobs in mass Zoom calls. Some, due to technical issues, weren't able to connect to calls and were left to figure out via Slack whether they still had a job. It was a master class on how not to conduct a layoff.
To add insult to injury, the same day Carvana told employees they were out of a job, the company announced it was spending $2.2 billion to purchase several used-car auction sites from Kar Auction Services.
Robinhood announced in April that it would let go of 300 or so workers.
In April 2022, Robinhood announced it was making a 9 percent reduction in its workforce, which TechCrunch estimates impacted around 300 workers. The layoff followed a "hypergrowth" period during the earlier lockdown period of the pandemic where the retail investing platform saw huge gains in activity leading to its July 2021 IPO. The stock debuted on the NASDAQ at $35.15, but has steadily fallen since and trades at around $7 a share by mid-June 2022.
Tesla employees were told in June to brace for a possible 10 percent reduction in salaried workers.
Citing a "super bad feeling" about the economy, Elon Musk announced to Tesla employees on June 2 that he was enacting a hiring freeze and that probably 10 percent of salaried employees would be cut. However, he indicated the layoffs wouldn't impact hourly production employees and in fact, he had plans to increase the production workforce. A few days prior to that announcement, Musk told salaried employees that they must return to the office or resign, a move many cited as a "pre-layoff layoff" designed to reduce the number of severance packages in any forthcoming layoff.
As stay-at-home stocks fell, Netflix and Peloton employees were told to stay home.
While Netflix and Peloton thrived during the lockdown in 2020, their stocks have taken a hit during the great reopening. Peloton reported a near $440 million loss in earnings for the quarter ending December 31, 2022, which led to layoffs for 20 percent of corporate staff, or around 2,800 employees.
Netflix had a more modest workforce reduction, mainly focused on its infant companion website, Tudum, which mainly affected contract employees. Tudum was launched in December 2021, and many have criticized the company for not properly marketing the website.