Anticipating a possible recession in the United States caused by high inflation and interest rates, companies from different sectors have launched a wave of layoffs, seeking to reduce costs and taking care of their profitability, analysts explained.
Morgan Stanley, Dropbox, Walt Disney and Gap are the latest to announce cuts, adding to the list of 1,464 companies that have cut their workforce since the beginning of January and until May 3, according to the intelligence.com site.
Amín Vera, director of Investments at Invala Family Office, said that layoffs will continue, especially in technology, financial, industrial and commercial companies. The least exposed are manufacturing and agriculture. The mining, oil and energy companies have not yet started because they are more dependent on labor.
The specialist pointed out that the effect on its listing on the New York Stock Exchange is not the same for all companies. But generally “it causes the share price to drop because it creates jitters, although if they can keep production going with fewer employees, the stock bounces back,” he said.
Heriberto Sandoval, independent investment advisor, commented that unemployment deepens the recession cycle because consumption and demand for products and services are reduced.
“There is an impact on the share price of companies that announce layoffs because they seek to lower costs and maintain profit margins. Investors take this positively because salaries have a significant weight in the financial statements, ”he pointed out.
On Tuesday, Morgan Stanley announced the layoff of 3,000 workers and its stock fell 1.78% on Wall Street. On April 27, Dropbox announced that it was cutting 500 workers or 16% of its workforce. Its shares, by contrast, rose (+0.89) a day after the announcement, but have since fallen 1.39% on the NASDAQ.
Walt Disney shares, which will slim down its workforce by 3% and lay off 7,000 employees, rose after the announcement on April 24 and have gained 1.18% since that day. Gap shares also rose (+2.24%) after reporting the layoff of 1,800 workers on April 27. But since that day they have fallen 7.24 percent.
Other companies that last month or in April decided to lay off part of their staff in the United States are Tyson Foods, Walmart, 3M, Lyft, Whole Foods, Deloitte, Buzzfeed and McDonald’s.
