Tech, finance companies continue to layoff workers despite positive January jobs report

Yahoo Finance markets reporter Alexandra Semenova reports on the latest tech layoffs, including Zoom's announcement.

Video transcript

DAVE BRIGGS: Zoom announcing it will lay off 1,300 workers. That's around 15% of its workforce. The stock popping on the news. As you can see, Zoom is one of more than 300 tech companies to lay off workers so far this year. That's according to datatrackerlayoffs.fyi. And US employers overall have gotten rid of 100,000+ jobs so far this year, according to data firm, Challenger, Gray and Christmas.

Meanwhile, the most recent jobs report revealed robust hiring in January. What's the discrepancy here? Yahoo Finance's Alexandra Semenova here with the story. We didn't really see them in that jobs report at all. When will we?

ALEXANDRA SEMENOVA: Yeah, exactly, Dave. There's this mystery right now in the employment picture. You have Zoom today. You had Dell yesterday. It seems like corporate America can't lay workers off fast enough. But then you got the Labor Department's jobs report on Friday, and it's more than half a million jobs added in January alone. So it kind of is leaving everyone scratching their heads and wondering what is happening with the labor market when you're hearing of layoffs, but people are still hiring.

And Bank of America put it really well. They had one explanation for this contradiction. They said it's the end of corporate stimulus. So first, we had the end of the Fed stimulus. We had the end of stimulus checks. And now we're in a stage where companies are in belt tightening mode. And we're really seeing that with the tech companies. There was a period during the pandemic boom where some workers were furloughed. So companies had extra money. They were doing well in terms of performance. So they had all this extra cash to add on workers and keep that deal flow going.

And then, obviously, last year happened, and they got to this place where headcount was actually outpacing their sales growth. And so now they have to trim back on that. You have Amazon, Meta, Apple all laying off workers. And yet, they still have an excess of about 20% of hiring over the past three years that they have to kind of trim down on in order to get those sales back up.

And we're not only seeing this in the technology sector. We're seeing that with finance as well. You had Goldman Sachs, which took away its performance reviews during the pandemic, and then brought them back this past year to kind of get rid of bankers who were underperforming. And that actually eventually led to layoffs as well. So all of these companies are scaling back on their pandemic booms.

SEANA SMITH: Yeah, they certainly are scaling back. And when it comes to finance, we're also seeing the end or, really, the significant scale back of a number of bonuses this year. It seems like every day, we're hearing about another bank slashing the bonuses of employees that they did that, they were able to keep.

ALEXANDRA SEMENOVA: Yeah, so in addition to layoffs in the finance industry, bonuses have been another big question. And especially today, at Credit Suisse, Bloomberg News reported that some bankers had their meetings canceled. There were supposed to be compensation talks, bonus talks. And they were postponed indefinitely. I reached out to Credit Suisse. They didn't immediately get back to me on this. But there are discussions that they're trying to pause this while they figure out what to do with their investment banking business.

So, obviously, that has been in a lot of trouble. They've been losing a lot of money. And now there's speculation that they're looking for some relief in their investment banking business. They're looking for some sort of help with bailing it out. Even Apollo Global Management, there's rumors that it is potentially going to help Credit Suisse, which, I have to disclose, is our parent company. But as they figure out that restructuring, there's going to be no payday for these bankers.

DAVE BRIGGS: Yeah, it's been a rough, rough go in the investment banking sector. Alex, thank you so much. Great stuff.