What’s Behind the Sudden Gen Z Layoffs of Employees?

America witnessed significant layoffs across various industries, particularly in technology, finance, and retail sectors. Companies like Meta, Google, and Amazon were among those implementing substantial workforce reductions, citing reasons such as cost-cutting, restructuring efforts, and shifts towards AI implementation.

Over 130,000 job cuts were announced by more than 450 companies, reflecting a continuation of the layoff wave from the previous years. This trend was not isolated to big tech; even smaller startups and traditional businesses faced downsizing pressures amid economic uncertainties and a push for greater operational efficiency.

Gen Z.

Generation Z, born from the mid-1990s to early 2010s, is entering the workforce with digital nativity, and social consciousness. Gen Z places a significant emphasis on work-life balance, mental health, and purpose in their careers. They are known for advocating for flexible working conditions, showing a preference for remote or hybrid work environments, and often prioritize job satisfaction over traditional career ladders. This generation also tends to value transparency, honesty, and corporate social responsibility, sometimes challenging conventional corporate norms by demanding ethical practices and inclusivity. However, this can sometimes be perceived by older generations as a lack of traditional work ethic, leading to generational friction, although it could also be seen as an evolution towards more humane and sustainable work practices.

The tech industry benefited from the ongoing digital transformation and increased demand for AI and cloud services, allowing firms like Microsoft and Amazon to report highest earnings ever.

The energy sector saw profits soar due to geopolitical tensions affecting oil supply, while consumer goods companies capitalized on post-pandemic demand with low quantity supply, and price increases that outpaced inflation, leading to higher profit margins. This profit surge was also supported by a robust economic recovery in many regions, providing companies with the leverage to maintain elevated prices even as inflation started to ease.

Inflation in 2020-2024 has significantly impacted the average working American by eroding purchasing power and increasing the cost of living.

As prices for essentials like groceries, housing, and fuel rose faster than wage growth, many found their salaries insufficient to cover basic needs without cutting back on other expenditures or dipping into savings. This scenario has forced many into a cycle of financial stress, where even small increments in everyday items can lead to tough budget decisions. Additionally, with interest rates rising to combat inflation, borrowing costs for mortgages, credit cards, and loans have increased, further straining household budgets. This situation has not only affected individual financial planning but also contributed to a broader sense of economic insecurity, particularly among those without significant savings or investment income to buffer against inflation’s effects.

What do you think?