Retailers scale back hiring as slowdown worries grow
Walmart, Amazon and FedEx among firms cutting staff
NEW YORK >> After going on a frenzied hiring spree for a year and a half to meet surging shopper demand, America's retailers are starting to temper their recruiting.
The changing mindset comes as companies confront a pullback in consumer spending, the prospect of an economic downturn and surging labor costs. Some analysts suggest that merchants have also learned to do more with fewer workers.
The nation's top employer, Walmart, said it recently over-hired because of a COVID-related staffing shortage and then reduced its head count through attrition. In April, Amazon said it, too, had decided that it had an excess of workers in its warehouses. And FedEx, whose customers include big retailers, said late last month that it was hiring fewer people.
In addition, new data shows that retailers in recent months have been scaling back sign-on bonuses and are no longer relaxing job requirements — a sign that they no longer feel compelled to expand their applicant pool, according to the labor analytics company Lightcast. And Snagajob, an online marketplace for hourly work, reports that job postings in retailing have been slowing in the past couple of months, though they remain up from a year ago.
Retailers “are going to take a conservative view of what's possible and what's necessary, because the price they will pay for being wrong will be minimum if they run out of goods and don't have enough staff, and massive if they wind up with an inventory glut and they have too many people employed,” said Mark Cohen, director of retail studies at Columbia University and a former CEO of Sears Canada.
The easing of retail hiring is happening in a labor market that has undergone volatile swings throughout the recovery from the pandemic recession of 2020. Early on, companies like Amazon, Target and Walmart that provide necessities and goods for the home stepped up their hiring to meet a crushing demand from online shoppers. At the same time, stores like Macy's and Nordstrom whose clothing lines were considered non-essential by many at the time, temporarily laid off workers during nationwide lockdowns.
The pullback in retail hiring comes against the backdrop of a still-robust national job market. On Friday, the government is expected to report that America's employers added 275,000 jobs in June, according to economists surveyed by the data provide FactSet. That would amount to a solid gain, though it would be the smallest monthly total in more than a year. It would suggest that the pace of hiring may be easing — something the Federal Reserve has been hoping for as it looks to slow the economy and curb high inflation.