These are some of the reasons why companies are making people redundant.
Economic Uncertainty and Cost Cutting
As we all know economy is not growing as we would like it, there is high interest rates, consumers are being cautious with their spending.
As a result, companies are responding by reducing their fixed costs as staffing issues are usually the largest expenditure
Post-Pandemic Over-Hiring
Many organisations hired aggressively during and after COVID, expecting growth to be continous.
The demand anticipated at the end COVID did not grow as fast as expected, so companies are now “right-sizing” their workforce.
Automation, AI and Technological Changes
Job roles which involve routine administration, data processing, customer support, and some creative or technical tasks are being reduced or reshaped.
As a result, organisations are investing in tools that allow for fewer people to do the same work, especially in back office and support functions.
Investor and Shareholder Pressure
Public companies are under pressure to protect their profit margins. Redundancies often boost short-term financial results. However, over the longer term the impact can produce mixed results.
Sector-Specific Downturns
Technology, media, finance, retail, hospitality and some professional services have been hit particularly hard.
It has been reported that even profitable companies are cutting staff as a preventative mood, not necessarily because they are failing.
Higher Operating Costs
With higher wages, energy costs, rent and borrowing costs mean companies need to find savings elsewhere.
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