The US retail industry has been facing a significant reduction in workforce, surpassing the tech sector in total layoffs. This comes as both large and small retail players struggle to adapt to changing consumer patterns and economic challenges. In contrast, the tech industry experienced mass job cuts, with more than 139,690 workers laid off in U.S.-based tech companies in 2023, according to a Crunchbase News tally.
The retail sector’s slowdown in hiring is evident in the decrease of job openings to 10.7 million in June. Walmart, one of the largest employers in the U.S., laid off 200 corporate employees last week. E-commerce and tech retailers are particularly affected as some consumers return to in-store shopping. Shopify, an e-commerce company once seen as a potential competitor to Amazon, announced a 10% workforce reduction in late July after reporting a $1.2 billion net loss in the second quarter.
Several other companies have also announced large downsizing rounds, including Salesforce, which laid off 7,000 workers on January 4th, and Wayfair, which cut 1,750 jobs. Despite these layoffs, a report from ZipRecruiter found that 79% of laid-off tech workers found new jobs within three months of losing their old ones.
Retail disruptors are also feeling the pressure, with Warby Parker, StockX, Allbirds, and Stitch Fix announcing layoffs this year. Funding for startups has decreased, with global funding dropping 23% year over year in the second quarter, according to data from CB Insights.
As the economy continues to face uncertainty and fears of a recession, both the retail and tech industries are bracing for potential downturns. Companies are making difficult decisions to cut costs and restructure their operations in hopes of weathering the storm and preparing for future growth.