IMP factoid. Yes, big tech has recently started laying off workers, but the layoffs are nowhere near the number of new hires during the pandemic. See the chart below.
Bars, Hotels and Restaurants Become the Economy’s Fastest-Growing Employers
Hospitality companies revive their hiring after pandemic cuts, offsetting slower growth in tech jobs
By Nate Rattner, Danny Dougherty and Alana Pipe, WSJ
March 5, 2023 5:30 am ET
Operators of hotels, bars and restaurants—hit hard as the Covid-19 pandemic took hold—are now among the country’s fastest-growing employers, offsetting a slowdown in tech-related hiring.
The leisure-and-hospitality industry is rebuilding its workforce after cutting back during the pandemic’s early days. In contrast, companies focused on providing business and tech-related services have slowed their growth in recent months.
Because the hospitality industry includes a larger number of private-sector jobs than the tech and information sectors, the shift in hiring patterns has helped keep the U.S. unemployment rate at a 53-year low and the overall job market tight.
Here is a look at how hiring patterns have shifted in recent years.
Bar height represents industry’s share of total private payrolls
Notes: Seasonally adjusted. Share of payrolls is from beginning of each period.
Source: Labor Department
Professional and business-services companies and the tech-heavy information sector were among the industries to add workers at the fastest pace early in the pandemic
The information industry accounts for about 1-in-40 private-sector jobs. The larger and harder-hit healthcare and hospitality sectors make up almost 30% of private jobs, and they were dealing with declines in employment.
Throughout the first half of 2022, hiring for information jobs continued to grow and the hospitality industry outpaced most other industries.
Since mid-2022, the growth in information jobs has slowed relative to the rest of the economy, while the hospitality and healthcare businesses have been among the fastest-growing industries.
And in the past two months, the information sector has lost jobs.
“The sectors that are seeing above-average layoffs are those that saw explosive head-count growth after the pandemic,” said Julia Pollak, chief economist at jobs site website ZipRecruiter.
Meanwhile, the hospitality and healthcare industries combined to add 207,000 workers in January, or nearly half of that month's private-sector gains.
Since November, about half of job-cut announcements among U.S.-based employers have come from tech companies, according to outplacement firm Challenger, Gray & Christmas.
The cuts partially reverse some of the hiring made during the height of the pandemic, when lockdowns led to increased demand for tech products and services.
Payrolls grew faster at most companies in the S&P 500’s technology and consumer-discretionary sectors during the first two years of the pandemic than during the preceding two-year period, according to a Wall Street Journal analysis of FactSet data.
Share of companies, by S&P 500 sector, that added employees more quickly during the first two years of the pandemic than during the two previous years
Note: Head-count figures are as of year-end, except the Salesforce 2022 figure, which is as of the end of the third quarter. Figures have been rounded to the nearest thousand.
Sources: FactSet; company filings and announcements
The tech layoffs might not be affecting the broader employment data for other reasons. Job-cut announcements don’t always shrink company workforces as much as promised. Business can improve, vacant jobs can go unfilled and layoffs can sometimes take months to execute.
Hiring also remains strong among some of the country’s biggest companies. Chipotle Mexican Grill Inc. said in January that the restaurant chain plans to hire 15,000 workers in the U.S. ahead of an expected increase in demand. Some food businesses—such as Kroger Co., the largest U.S. supermarket operator by sales—are recruiting former employees to fill staffing gaps.
Write to Nate Rattner at nate.rattner@wsj.com, Danny Dougherty at danny.dougherty@wsj.com and Alana Pipe at alana.pipe@wsj.com
Comments