A recession could hit white-collar workers the hardest. Here’s why

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CNN Business

White-collar workers would be hit harder than blue-collar workers if the U.S. slips into recession soon, according to one economist, who said businesses have undergone dramatic restructuring in the wake of the pandemic.

“Covid changed things,” said William Lee, chief economist at the Milken Institute. The pandemic has accelerated automation, Lee said, and that is pushing low-skilled white-collar workers out of work.

“In this post-Covid environment, companies are restructuring. They’re changing the way they operate, they have to be more efficient. And what they’ve done is buy more software, deploy more technology, where they think ‘I need more people qualified to work for me,” Lee said.

The technology industry has seen a series of widely publicized layoffs in recent months as companies seek to rebalance their workforces after growing too quickly during the pandemic and misjudging the duration of that surge in demand.

The latest report from replacement firm Challenger, Gray & Christmas shows that technology companies have so far announced plans to cut 31,200 jobs in November, more than double the cuts announced from January to October this year.

Just last week, Facebook parent Meta announced it would cut 11,000 jobs and Amazon began its biggest layoff ever, which will see 10,000 people cut from its workforce.

Andrew Challenger, senior vice president and head of sales and media at Challenger, said he’s seeing an increase in the number of mid-level and engineering layoffs in the industry.

“We’re seeing big layoffs in the tech sector. They tend to be high-paying, white-collar jobs,” Challenger said. “Tech companies hired a lot over the last year and a half and are going through what appears to be a correction.” to say.

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