2025: The Year of Mass Layoffs

Employment as we know it has forever changed.

2025 will be a year that we all will remember. The mass layoffs have hit a fever pitch. This layoff cycle began with Elon Musk purchasing Twitter and laying off 80% of its workforce. Many believed that this would destroy the company, but X as it is now known has not missed a beat. After the 2024 Presidential Election President Trump appointed Elon Musk to search for inefficiencies in government spending. Musk was named head of the Department of Government Efficiency (DOGE). Elon Musk and the Department of Government Efficiency has been on a rampage. Government jobs have historically seen as the safest place to be as they provide stability and consistent income. The benefits offered included retirement, healthcare, and PTO are unmatched. Job applications for government roles routinely amass thousands of applicants looking to gain the treasured position. Once hired an employee would then be on a countdown to their 20 year term where they would be paid a handsome monthly retirement for the remainder of their life. The idea of being 45 or 55 and receiving consistent income added with Social Security was an easy sell for those able to get the role.

The Technology industry and others like it have used the government layoffs as a cover to purge the unwanted employees they hired during the Covid-19 hiring spree. During 2020 companies were divided into Essential or non Essential businesses determined by someone in a suit working in Washington, DC. Those falling in the Non Essential lane were laid off and given unemployment benefits that often outpaced their previous earnings. Add to that 3 stimulus checks paid out directly from the government and we created a perfect storm for economic distortions. Millions of people were at home with more money then ever. Online shopping exploded. The 7 largest companies of the S&P 500 were major benefactors to this setup. The spending and increased demand drove the need for more employees at the largest firms. LinkedIn became one of the hottest applications as employees were able to communicate directly with hiring managers and give their reasons why they would be great hires for roles in the private sector. The government spending nearly $9 trillion dollars from rescue packages drove the demand for more workers and technology professionals to handle the demand.

It is amazing watching what the job market has become in the past 3-4 years. Human Resources departments have received a large share of the terminations. Companies reducing their rosters have less of a need for recruiters.

I cannot say that I saw this level of carnage playing out when I left the Information Technology field, but the whispers were present in the summer of 2023. Everyone was rushing to get into “Tech”. The appeal was obvious, work from home while making a larger salary than other fields. Lower barrier of entry, often just needing a few certifications to get on your journey compared to being lawyer or doctor. It made perfect sense. This is when I began realizing that the rate of growth was unsustainable. I began to think as an owner, why should I pay an American to work from a different country and pay them $200k a year when there are similarly skilled workers in every other nations that would happily work for 1/5 of the price. This was at the peak of the labor shortage and companies began turning to offshoring for workers. I would call into my local pizza shop and get an operator from India or South America. The transition has already begun and was available to see if we looked a bit harder. Businesses from McDonalds to Aldi all scurried to install self checkouts. This permitted fewer employees to deal with the volume of shoppers. ChatGPT was launched during this time and the reviews spoke of a time to come where repetitive tasks completed by lower level employees would be less needed as their positions were filled by computers and overseas workers. Many who looked from a distance thought this could not be the case, but I began extrapolating the technology out 5-10 years.

I believe we have entered the Post Employment Era. An understanding between employer and employee that has been the bedrock of our work culture for 100 years has been forever severed. The trust that once drove workers to pursue their best selves has been replaced with the realization that whenever a company can they will find any means to terminate their employees. America has faced similar times like this in the past. Factory positions began getting shipped overseas in the 1980s. The 1999 tech bubble was another example of overexuberance and mass hiring that led to a deflationary recession. 2008 brought us the Great financial Crisis with a World Wide recession. Citizens have forged through difficult times and battled back to greater heights, but their is something different about this time around. Never have American workers had to complete with workers on the other side of the world for roles in White Collar positions. An open job on LinkedIn offering remote work routinely gets thousands of applicants. The sheer volume is discouraging to a worker new to the field and looking for an opportunity. AI is getting more dynamic with every passing day. We who see what is coming need to find opportunities for ownership. That can be heavily investing in Stocks or creating companies that we own that cannot be done from a different country. The world our children will be raised in will look nothing like the existence that we see now. To give them the best chance at success we need to have something that we can pass on to them when they are of working age.

What do you intend to leave for your children? Will it be land, business, or stocks? The cost of living has become unaffordable for most Americans. The jobs that were once recession proof are now being proven to be nothing more than an illusion. A brave new world do we see ahead. Decisions we make today will make all the difference.

By: Richard Harmon