After a year of near-zero economic growth, job creation is slowing in Europe, and surveys suggest that more businesses in the region are preparing to lay off workers, threatening to further dampen growth and drain public coffers [9dea52e1]. Germany's unemployment rate has climbed to 5.8%, the highest level since 2017 outside the pandemic period, while the UK's joblessness has risen to 4.3% [9dea52e1]. Unemployment is also edging up across the 20-nation eurozone, with the pain concentrated in the region's richer north, especially Germany [9dea52e1]. The reliance on manufacturing and exports has become a liability in an era of geopolitical tensions and faltering trade [9dea52e1]. Rising joblessness could also help reduce inflation, opening the door to interest-rate cuts next year by the European Central Bank [9dea52e1]. European businesses, which have been reporting strong profits, may pivot to layoffs as the downturn drags on and profits swoon [9dea52e1].
However, in contrast to the rising unemployment rates in Europe, the unemployment rate in the eurozone fell to a record low of 6.4% in November [b0bc0598]. This is underpinned by a decrease of 99,000 in the number of unemployed people [b0bc0598]. The eurozone's unemployment rate has declined over the year despite a soft patch in the region's economy [b0bc0598]. The World Bank predicts that global growth will slow for a third consecutive year in 2024, with the world economy expected to grow by 2.4% this year [b0bc0598]. The US trade deficit unexpectedly contracted in November, narrowing to $63.2 billion [b0bc0598].
Labour markets in the US, UK, and eurozone are under strain. The eurozone faces increased vulnerability due to poor labour productivity and the potential for higher unemployment due to labour hoarding [c1888cb7]. The US shows a robust demand-driven market, while the UK struggles with weak demand and falling participation, keeping the employment rate low despite high vacancies [c1888cb7].
Multinational companies, primarily American and British, are implementing major restructuring plans by laying off thousands of workers. The layoffs are a result of falling revenues and weakening sales, leading to uncertainty in the global operating environment [40a91796]. Economists warn that the increasing layoffs should be a cause for concern in emerging and frontier economies, as retrenchment leads to a loss of income and savings for households, resulting in falling demand for goods and services [40a91796]. The layoffs also have indirect effects on emerging markets, such as reduced demand for exports and a decrease in foreign investment and tourism [40a91796]. The global wave of company layoffs may prompt central banks to cut interest rates earlier than expected, potentially leading to a strengthening of local currencies in emerging markets [40a91796]. Several multinational companies, including Vodafone, Citigroup, Barclays, Standard Chartered, Unilever, McKinsey, and Novartis, have already announced plans to reduce their workforce through layoffs as part of cost-cutting measures and business reorganization [40a91796].
If your company enthusiastically introduced new projects at the start of the year that are suddenly being paused for no specific reason, management might be trying to conserve cash. That could mean that layoffs are next. Some companies regularly send employees on business trips or to conferences. If that's been the practice at your place of work, but suddenly your employer is refusing to spend any money on business travel, perhaps it's trying to cut spending due to financial issues. Those same financial issues could lead to layoffs. If small perks like break room snacks and team lunches are suddenly disappearing, it could be a sign that your company needs to trim its spending, potentially leading to layoffs. To prepare for a layoff, boost your emergency savings, pick up a side job for additional income, and start networking immediately to explore potential job opportunities. It's important to be aware of these signs and take proactive steps to protect yourself in case of a layoff.