The crisis in the American job market continues. In July, businesses there laid off as many as 23,000 employees. In fact, everyone had projected that around one lakh new jobs would become available in July, but the resulting job losses, contrary to those expectations, have become a major talking point. Along with the ongoing challenges in the US job market, rising oil prices caused by the continuing war in West Asia are also believed to be a factor behind the layoffs.
Figures show that job cuts in the US have exceeded one lakh over the past two months, not just in July alone. According to details released by the US Department of Labor, an additional 1,03,000 jobs were cut in May and June. This latest data indicates that the US job market is weaker than previously estimated.
Meanwhile, the unemployment rate in the US, which stood at 4.2 percent in June, fell to 4.1 percent in July. However, the latest figures suggest that this decline is not a sign of an improving job market. In July, around 2,64,000 Americans stopped looking for jobs altogether, effectively withdrawing from the labor market. As a result, the share of people either employed or actively seeking employment fell to 61.4 percent, according to the Department of Labor — the lowest level recorded since February 2021. While the unemployment rate declined because a large number of Americans stopped searching for jobs, the fact that the actual number of people participating in the labor market has dropped significantly is itself a matter of concern.
Separately, prominent digital payments company Visa has laid off approximately 2,600 employees worldwide, amounting to around 7 percent of its total workforce. This decision has also had a severe impact on tech hubs in India, including Bengaluru, Hyderabad, Chennai, and Mumbai. Visa employees received an email between 4 and 5 am on the morning of July 29, and it was only after reading that email that they learned they had lost their jobs. Within just a few days of this, the company revoked access to office systems and took back laptops and ID cards as well. Visa has over 3,500 employees in India, though the company has not officially disclosed how many of them were let go. Notably, following in Visa’s footsteps, companies such as Microsoft, Meta, Oracle, Cisco, Cloudflare, PayPal, Atlassian, and Standard Chartered have also announced workforce reductions.