Key Advisors Wealth Management co-founder and CEO Eddie Ghabour tells Varney & Co. The recession is accelerating faster than the market is pricing in and Wall Street is set to hit “new lows.”
While layoffs in technology and media make headlines, economists warn of across-the-board job cuts in education in 2023.
A survey of 600 CFOs across a range of industries by Coupa, a cloud-based spend management platform, found that 100% of education CFOs responded with “Workforce reduction” when asked “What actions will the your organization in the next six to 12 months to drive growth in a downturn?’
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Teacher Appreciation Week runs from May 2-6. (iStock/iStock)
In an interview with FOX Business, Coupa CFO Tony Tiscornia said the education industry’s unanimous report of a shrinking workforce next half-year will offset potential challenges in the event of a recession.
E-learning company Udemy has cut 10% of its workforce and Seattle Public Schools is bracing for layoffs under a $131 million budget deficit.
The education unemployment rate in January was 3.2 percent, according to the Bureau of Labor Statistics, up from 3.5 percent a year ago. This is lower than the overall US unemployment rate of 3.9%.
Unlike manufacturers or the employment of skilled labor found in accounting, health care, and construction, the education sector does not produce a product or service that can be purchased, making it particularly susceptible to layoffs during economic downturns. .
Jobs in the education industry include K-12 positions and senior positions in teaching and administration. The industry’s financial leaders expect layoffs if the U.S. hits recession in 2023. (Fox News)
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Data compiled by Zippia showed that education services have already lost 136,000 employees from June 2021 to June 2022.
Government figures show 3.88 million people worked in education services in January, a broad category that includes teachers from elementary schools to college professors, workers in business, technical and other schools, along with support workers.
Other sectors most affected by the impending recession include Communications with 60% of industry CFOs citing layoffs as a solution, while Utilities, Law and Science round out the top five with 50% of CFOs from each industry to declare that they will reduce their workforce this year.
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LONGWOOD, FLORIDA, USA – Only 20% of Healthcare CFOs believe layoffs will affect healthcare in 2023. (Getty Images)
According to the survey, only 20% of CFOs in healthcare and accounting believe layoffs are on the table in the next six to 12 months, while just 17% of CFOs surveyed in the entertainment industry said they believe that job cuts will affect businesses.
With 86% of CFOs saying layoffs are a last resort, Tiscornia said talent and people remain a company’s greatest asset and should be treated as such.
“But in many cases, CFOs don’t have the level of data and visibility needed to really consider alternatives to redundancies where possible,” he added.
Are there options for layoffs?
Hundreds of media industry executives were laid off this week during a violent period that saw Warner Bros. Discovery, Gannett and others to cut staff as financial uncertainty plagues news organizations. (Getty/Getty Images)
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According to CFOs in the survey, alternative cost-cutting measures are now being explored with 38% supporting price increases on goods and services sold, while 33% said stricter spending rules would help and 32% pushed for renegotiation of supplier contracts.
Essentially, “Proper planning, digitization and optimization will minimize or completely avoid the impact of layoffs,” Tiscornia concluded.
In the next six to 12 months, 33% of finance leaders across all industries said they are more concerned about supply and demand, while 32% said they are looking at cutting costs and 27% said they are looking forward to losing employees.
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