Why the October Jobs Report Is So Strong Despite Tech Layoffs

Tech companies’ fresh batch of layoff announcements this week followed layoffs over the summer by other tech firms amid rising interest-rate increases and fears of recession.

US employers overall, however, boosted their payrolls by a net 261,000 jobs in October, the US Labor Department said Friday. That was a robust monthly increase, but also the smallest in nearly two years.

The differences reflect three main factors: a lag between real-world events and government data; an indistinct categorization of technology jobs in the Labor Department report; and the continued strength of the broader labor market.

First, there is a time lag between the companies’ statements and the data captured in the department’s jobs report. Layoff announcements from ride-hailing company Lyft Inc. and payments company Stripe Inc. both came on Thursday—in November—and so weren’t counted in the October employment report. Some laid-off employees can stay on company payrolls for several more weeks after they receive a pink slip, creating an even longer delay between the news headlines and the government’s jobs tally.

Second, the department does not break out employment in the tech industry as a separate category in the monthly jobs report, meaning cuts at tech corporations are scattered throughout the report in a variety of industries such as professional and business services, information and finance. That makes it difficult to draw conclusions from the government data about the labor-market performance of the entire tech industry.

Third, layoff announcements at large tech companies might be headline-grabbing, but they account for a small portion of employment activity. Employers across most industries are still hiring as their demand for labor well exceeds the pool of available workers. That strong demand—reflected in historically high job openings that rose to 10.7 million in September—means many tech workers who get laid off can quickly find new jobs.

Companies in e-commerce slightly lowered their head count last month and hiring in computer systems design has slowed in recent months, Friday’s jobs report showed. But more broadly, the data reflect an economy in which employers are still hiring at a solid but slightly slowing pace as they seek to catch up with the sharp rise in demand for their goods and services following the pandemic downturn.

Notably, manufacturers added jobs at a strong clip in October despite a confluence of economic challenges, including a stronger dollar, waning demand for durable goods and rising interest rates.

The healthcare sector hired 53,000 employees last month, with nursing facilities and hospitals adding workers.

Employment in leisure and hospitality continued to rise in October but remains down by about 1.1 million jobs from February 2020, the month before the pandemic hit the US economy.

Write to Sarah Chaney Cambon at [email protected]