The index that tracks layoffs by US companies

January 12, 2023

A news-based Layoff Index based on layoff events captured by RavenPack illustrates how to track US companies which have cut their workforce.

A News-based Layoff Index: US Companies Layoffs image

Human capital is one of the most critical drivers of economic performance. As mass layoffs at large companies make headlines, RavenPack allows analysts to track these events from global news feeds in real time. To illustrate this, we created a news-based Layoff Index tracking US companies reporting cuts in their workforce.

We observed that reports of layoffs were more than twice their historical average during the early months of the Covid-19 pandemic, and steadily fell from 2020H2 to the end of 2021 to reach a historical low. Layoff reports have been slowly increasing throughout 2022 and are currently slightly above their pre-pandemic levels.

0 300 600 900 1200 2020 2021 2022 The news−reports of layoffs has increased in recent months Number of US companies reporting layoffs during calendar month 3-Month Average Pre-Pandemic Average Count

Zooming-in on the Technology sector, we found that Technology companies have comparatively reported more workforce cuts in 2022, with current levels close to their historical peak.

0 20 40 60 2020 2021 2022 Count US Technology companies are more exposed to layoffs, with volumes comparable to pandemic levels 3-Month Average Pre-Pandemic Average

Overlaying news-based layoff reports with insights from RavenPack Job Analytics , we tracked changes in hiring patterns. We found that in March 2020, reports of job cuts increased and hiring growth plummeted, as pandemic-induced lockdowns started to take their toll on the economy.

0 100 200 300 2020 2021 2022 2023 % YoY Change In 2021H2, the Hiring growth slows down several months before layoffs start to increase YoY Change in Jobs Hiring growth and Layoffs Hiring Growth Covid−19 Lockdowns Layoff index Hiring slows...

The Covid-19 pandemic created a sudden socioeconomic stress, which explains why both signals moved in sync in 2020 and 2021. Under calmer market conditions, the economic stress on employment reflects on hirings before it translates into layoffs.

By combining insights from news, job postings, and other relevant datasets, RavenPack enables investors and analysts to detect patterns ahead of the economic news cycle, and capture opportunities.

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