Source: Securities Times

Walmart Inc, the head of one of the world's top 500 companies, said on Tuesday that it would raise the minimum wage for American workers from $12 an hour to $14 an hour. The average hourly wage for the company's American staff is expected to exceed $17.50. The market analyzes this as the company is trying to retain store and warehouse workers in a labor-tight job market.

The US retail industry has largely avoided layoffs and wage cuts, but the technology industry is a different story. Within months, companies such as Microsoft Corp, Intel Corp, Facebook Inc and Alphabet Inc-CL C have launched unprecedented layoffs, and Apple Inc is rumored to have cut non-seasonal staff in retail channels outside Apple Store. The giant layoffs reflect the embarrassing situation that the growth rate of the US technology industry has slowed after more than two years of rapid growth. Some analysts believe that next, US technology companies as a whole will lay off a further 5% to 10%.

According to data compiled by Layoffs.fyi, the global technology industry cut more than 57000 jobs in the first few weeks of 2023.

About 340000 employees will get a raise

According to documents disclosed by Walmart Inc, the company employs 1.7 million people in the US, 94 per cent of whom are hourly workers, employing hundreds of thousands of employees during the COVID-19 epidemic to meet strong consumer demand for goods.

Walmart Inc said that from the beginning of March, the hourly wage of store employees will be raised to between $14 and $19, and spokesman Anne Hatfield said that their current hourly wage is between $12 and $18. And it is expected that with the implementation of the plan, the average hourly salary of the company's employees in the United States is expected to exceed $17.50. Hatfield also said that about 340000 employees, or more than 20 per cent, would get a raise.

It is understood that Walmart Inc's starting salary in many parts of the United States is usually the local minimum wage, which has also been criticized by labor organizations from all walks of life, but the company has been improving its treatment in recent years. The company's latest move will narrow the gap with Amazon.Com Inc, Target Corp, Costco Wholesale Corp and other competitors. At present, the minimum wage for Amazon.Com Inc and Target Corp is $15 per hour, while Costco Wholesale Corp's starting salary is $17 per hour.

Some analysts say Walmart Inc's pay rise may have a knock-on effect on the entire service industry, suggesting that retailers are under pressure to compete for labor. Gregory Daco, chief economist at Ernst & Young, said that the retail industry tends to have higher turnover rates than other industries, and if too many employees are lost, the cost of hiring and training new employees will be high.

Despite layoffs in recent months, including dozens of large companies in the US, there is still a gap in demand for workers in the service sector, with Walmart Inc listing nearly 30, 000 jobs on his recruitment website, according to the data. According to the latest data from the U.S. Department of Labor, the number of job openings in November 2022 was 10.5 million, an all-time high, with more than 1 million job openings in the retail sector. So far, the US retail industry has largely avoided layoffs and wage cuts, according to CNBC. Instead, they need to continue to struggle with a tight labour market, and these ordinary workers are feeling the pressure of rising costs of living such as food and electricity.

"the labor market is still competitive, especially the demand for odd jobs is still strong. Companies are continuing to compete for them by raising wages." Andy Challenger, senior vice president of re-employment company Challenger, Gray & Christmas, said in an email.

Some analysts said that Walmart Inc's move is also a signal of optimism about the economy. Mark Zandi, chief economist of Moody's Corporation, said he was surprised that Walmart Inc raised his salary "so much" given the risk of recession in the United States.

"this shows that Walmart Inc believes that the economy will not fall into recession soon; or if it does, it will be a short and mild recession." Zandi said in an email. He believes the move reflects long-term pressure on retailers to retain staff as labour reserves shrink.

The technology industry is jittery.

Half the sea, half the fire.

While the retail giants are showing off their skills to retain or recruit more workers, the technology industry has begun a wave of layoffs after two years of rapid growth.

According to data compiled by Layoffs.fyi, the global technology industry cut more than 57000 jobs in the first few weeks of 2023. The number of layoffs compiled by the website by global technology companies in 2023 has more than doubled from last week, when it recorded layoffs of just over 25000.

The figures show that global technology companies are expected to cut more jobs in 2023 than in 2022, with 185 technology companies cutting 57601 jobs in the first few weeks of this year. Last year, 1024 technology companies cut 154336 jobs.

In 2022, in an effort to curb inflation, the Fed approved seven interest rate hikes in a row that year, which particularly hit the technology industry. Some analysts believe that Silicon Valley as a whole is more sensitive to raising interest rates than other industries, because many technology companies usually rely on a large amount of capital flow to pursue their target projects before making a profit. Alphabet, the parent company of Meta, Microsoft Corp, Amazon.Com Inc and Alphabet Inc-CL C, the parent company of Facebook Inc, has begun efforts to "keep profit margins unaffected" and fend off the widely expected coming recession by cutting costs and limiting spending in non-strategic areas.

The most recent typical example of cost-cutting is the recent wave after wave of layoffs at technology companies.

Microsoft Corp recently announced that it will cut 10, 000 jobs worldwide by the end of March, accounting for about 5% of its workforce, due to the poor economic situation and changing customer demand. Layoffs and related changes will cause the company to lose $1.2 billion in earnings in the fourth quarter of 2022.

Amy Hood, CFO of Microsoft Corp, responded to analysts' questions about large-scale layoffs at the earnings meeting on Jan. 24, local time. "in the last four quarters, our employee growth slowed relatively year-on-year," she said. The reason for this decision is that we want the company's cost structure to be more consistent with revenue. Of course, we make decisions very carefully and carefully. after all, we don't want too many talented people to be affected. "

According to the Wall Street Journal on January 26th, more than 3000 employees of another technology company, Amazon.Com Inc, in New York, California and Washington State, were recently notified that they would lose their jobs. This is part of the company's second wave of massive layoffs. This week and last week, Amazon.Com Inc submitted layoff notices to the three states in accordance with the law.

On the same day, Twitter, which laid off a lot of staff in the fourth quarter of last year, was also exposed to continue to lay off staff. Twitter will cut another 50 jobs in its product division in the coming weeks, according to people familiar with the matter, the Global Times said, citing a US business insider website. This means that when Musk takes over Twitter, the company will cut more than 75% of its jobs.

The layoffs of the giants reflect the current state of the US technology industry. In addition to the giants, 20 or 30 US technology companies, including digital currency trading platform Coinbase and customer relationship management software service provider Salesforce.com Inc, have also said they will cut 10 per cent or more of their jobs.

The U.S. technology industry cut more than 97,000 jobs in 2022, the highest in more than 20 years, and the situation shows no sign of improving this year, Bloomberg said. Some analysts believe that next, US technology companies as a whole will lay off a further 5% to 10%.

Edit / Viola