Career change brings excitement because of the higher salary, different workplace environments, and potential career advancement. The Great Resignation is a term coined at the height of Covid-19 when many people resigned. Even as predictions of an impending economic recession rise, many individuals are still contemplating whether now is still a good time to test the job market. Workers continue to leave their place of employment in record numbers. In the United States alone, 4 million workers resigned in April.
With inflation climbing to a 40-year high, and the price of goods and services negatively impacting the finances of households and companies around the world, there has been a shift in the job market. Hiring freezes are becoming more common each week. Big companies like Microsoft and Twitter are either slowing hiring or putting hiring freezes in place. Netflix announced the second round of annual employment layoffs, affecting about 300 people.
In this episode, we discuss how the labor market has been impacted by the changes in consumer behavior and factors to consider before switching jobs in this environment. Join our hosts, wealth manager Lee Michael Murphy and career advisor Sergio Patterson. Tune in to this week’s episode of The Free Retiree Show.
What you’ll learn in this episode:
Lee Michael Murphy: [00:00:00] welcome into the free retiree show. Your go-to podcast. Video career, your money. I’m your host wealth manager, Lee, Michael Murphy, along some of pal Sergio Patterson. What
Sergio Patterson: is up everyone?
Lee Michael Murphy: So today we’re talking about the job market. It’s changing, sir. You feeling the change.
Sergio Patterson: Yeah, we’re in living in interesting times. The job market is, uh, another one of those interesting things. Uh, lots, lots to talk about today, man. It’s chaos
Lee Michael Murphy: So people right now are thinking about, should I jump jobs? Right? You We went through this great resignation, uh, you know, a historical event, uh, people are still in that mode thinking like, is it time to jump?
Um, you know, and feels like things are changing right now. , I’m, I’m really interested to hear what you have to say about it, but, uh, are you seeing the same thing? Things, like the, the winds are changing in the job.
Sergio Patterson: Yeah, yeah, yeah, it’s an interesting thing.
I’m gonna get into it. So we’ll talk, you know, layoffs, what’s going on, offers being rescinded. We’ll talk competitive salaries. Should you jump right now? But what’s most unique about this environment right now is yes, there’s layoffs, but it’s still so [00:01:00] competitive that you can still find great opportunities out there.
Mm-hmm and get pay increases, but, it’s a very unique time because. You just don’t know with all these different, uh, macro conditions, you know, we have a war, we have inflation, we have all these things happening around us. So I think it’s, it’s a, it’s a very unique time that we haven’t seen in a long time.
Um I wanted to cover today a few big buckets. I think the first one is like, well, what’s going on? Just like zooming out. What’s really happening from like a layoff standpoint, um, and a lot’s happening. Um, So top of mind, right. Is which of the big companies are actually doing layoffs.
If you just do a simple Google search, a lot of companies have done layoffs some of the biggest ones, man, like, , just look at this list, Coinbase. We heard about that they laid off 18% of their workforce. Yep. That’s 1100 people who lost their
Lee Michael Murphy: jobs. Crypto getting hit harder
Sergio Patterson: now, crypto getting destroyed.
And every, a lot of the Google, apple, Amazon, a lot of them left to go to Coinbase. Um, I knew, I knew people who left Facebook to go to Coinbase [00:02:00] and they got laid off. Um, and it’s, it’s unfortunate, but you know, I hope Coinbase makes a, a, you know, a big return, but they got hit. They got hit probably the hardest, um, Netflix, they laid off, uh, hundreds of people.
Netflix was a unicorn, uh, their stock got destroyed. I think you know that Lee?
Lee Michael Murphy: Yep. Mm-hmm uh, Roku, Roku too I think last time I checked there about 80% down.
Sergio Patterson: Yeah. It’s it’s all bad. Um one of my favorite companies, Tesla, they laid off 10%
Lee Michael Murphy: of their workers. Your boy Elon.
We believe in Elon. What happened, I believe in Tesla,
Sergio Patterson: Musk is he’s kind of lost my.
Lee Michael Murphy: My support a little bit. You have to get a tattoo removal on that Elon face on your, your, your, your behind. So, right.
Sergio Patterson: Yeah. Uh, yeah, Elon’s lost his mind. Uh, but anyways, yeah, Tesla, big company, they lost 10% Robin hood, another trading app.
Mm-hmm almost 10%. Um, and then hiring freezes. So you asked what I’m seeing right now, a lot of companies, um, Or doing what we call hiring freezes. So that’s just like a, literally, like they’re not either not hiring they’re slowing hiring, or what we talked about was, jobs being rescinded.
So you’re seeing a lot of stories [00:03:00] out there right now where, you know, let’s just say, I’m, I’m an employee at X company. I find this great offer at this other company. I tell my company, I’m leaving. I quit. Then that company, resends my offer because of these market conditions that’s happening right now.
You for me, it goes back to, this is one of those moments where you have to realize that companies are gonna do what’s in their best interest and not always look out for you. Yeah. So when you ask about, should I leave my job right now? It’s a big question. I think it’s not all doom and GL.
Right. But I think even when we were talking about stocks picking quality, right? Mm-hmm in this market. If you’re gonna leave, you need to pick a quality
Lee Michael Murphy: company. Yeah. I think, you know, this last, you know, two years, uh, you know, it felt like. You were the prettiest girl at the ball. Like, you know, when you, it comes to like looking for jobs, it’s like, oh, you’re so great.
We love to have you part of our company. Everything you do is fantastic. How does a 10% pay, raise [00:04:00] get, uh, feel from what you’re getting right now? Maybe 15. How about 20? How about 25% pay? Raise? You’re worth it. And then I don’t know, like someone snapped their fingers and then you realize you’re just not the prettiest girl at the ball.
Yeah, we’re no longer the prettiest
Sergio Patterson: girl at the ball. Um but to your point, dude it’s still a competitive market. So I will say, um, , like I was doing some, uh, a little bit of research on this and a lot of the big tech companies are still worried about losing their talent to the other, like companies, you know, the poaching of talent.
Right. Mm-hmm. So a lot of these companies are trying to increase, uh, salaries, increase bonuses, increase, pay overall, so that employees are less likely to leave. Um, Amazon, uh, did a, a big base salary raise for other employees. Microsoft. I think I wanna say they’re gonna double, um, in some cases people’s pay, I could be wrong on that.
Don’t quote me on it. Mm-hmm um, but a number of companies are starting to think of ways to, uh, retain their talent, right? Because it’s one thing is bringing in new talent. But I think the other part of this is how do you keep the people you already have. So that’s the other thing that’s happening, uh, is, is companies are starting to think of new [00:05:00] ways on how to, um, make it easier for employees, promotions, Google, Google implemented something recently.
Um, it’s, it’s a really interesting environment. And I think the other thing dude is while the, the, the the financial game, the stock market crashing stock is a big component of some tech employees.
Lee Michael Murphy: Mm-hmm
Sergio Patterson: so you have, you have tech employee a who said, oh, I’m getting paid X amount a year, but my stock that’s at $500 a share.
Uh, huh? What happens when it gets cut in half? Yeah.
Lee Michael Murphy: You know, all this the Roku employees, like, yeah. We’re gonna give you all this wonderful Roku stock. Okay. So is not how it is turning. This is turning out the way I want it. Their pay literally
Sergio Patterson: went in half. So how would you feel if your pay got cut in half?
How would that make you feel?
Lee Michael Murphy: Absolutely. I mean, in the tech space, we’re looking at, you know, stocks going well below 50% , in a lot of companies, you know? There’s this difference, you know, of how we look at the general markets and everyone feels some pain right now in the general market.
As I call it the S and P 500, like the big, the big dogs as you might call them, but there’s this like mid company [00:06:00] size, small company tech space and healthcare space. they’re feeling it right now. They’re feeling it even more so than everyone else. So our hearts go out to you.
Sergio Patterson: This pay thing, and then we were talking about inflation in an early episode. So inflation is impacting all of us. Um, tech darlings are not immune, right? Mm-hmm . So with inflation comes, Hey, like my annual. 4% raise that I’ve been okay with for my entire life.
Um, maybe people aren’t as okay with that anymore. So what, what I’m seeing is a lot of employees are starting to question and starting to ask tougher questions on companies. When we think about, okay, when it’s performance review time, you’re gonna offer me a 3% raise, but inflation’s 8%.
Lee Michael Murphy: Yeah. That’s not right.
Sergio Patterson: Right. It’s it’s, I think it’s a tough question, cuz we have to understand that companies are going through it too, but um, I think employees are starting to ask those tough questions and they’re, they’re starting to see cuz while yes, it’s a tough market. A lot of people are doing layoffs.
there’s still a high demand for talented and skilled employees in, in Silicon [00:07:00] valley. So you could still go to a great company and get that 10, 15, 20% raise. I know people who are leaving companies and getting those raises right now, it’s still happening. So while I started with the doom and gloom, it’s still a very competitive market companies still need to, they need to figure it out because even though all this inflation and there’s not as much money coming in, There’s still opportunities out there.
Lee Michael Murphy: Absolutely. I got some stats for you and this kind of backs up everything you’re saying right now, a lot of people are feeling like, oh, the sky’s following. Well, let’s just look at some data and see, like, what does this job market look at right now? So I pulled up some, uh, information from the society of human resources and they said, you know, at the end of may, us employers added 390,000 new jobs.
Mm-hmm . Now does indicate a slow. Because, uh, over the past year, on average, it was around 400,000 jobs per month. But, the unemployment rate is held at around 3.6%, which [00:08:00] is, you know, considered what it was at pre pandemic levels. So although you might feel like everything is crashing down, you can see the shift, but let’s not panic everybody right now. No,
Sergio Patterson: I’m speaking specifically on the Silicon valley side of things, like I still think we are in a position of strength with companies right now. especially if you, if you’re, you’re thinking about the bigger name companies, uh, they’re still looking for talent.
Silicon valley is still hiring. There’s a huge demand and sometimes there’s not enough supply. Um, I know I’ve had companies reach out and I feel like I’m in a good spot, so I don’t feel like moving, but I’ve talked to people who are thinking about switching companies right now. And my advice to them is I’d be hesitant to go to a random startup in this environ.
That’s a good point . Like Lee, you could probably speak to this, but I’d find spaces that are, are, are more stable or maybe on the,
Lee Michael Murphy: the upswing you’re right. I’ve actually been listening to recent interviews of people that had, uh, their job offers [00:09:00] rescinded. Um, and most of ’em are coming from the startup.
So I didn’t realize that’s how you mentioned that, but they’re like, yeah, this was my story. I was, you know, at Silicon valley startup X, Y, Z, and they just took away my offer. And it’s like, that’s a common story right now. I’ve heard that multiple times.
Sergio Patterson: Yeah. It’s happened a lot in startup space. I think
the bigger companies right now, it’d be too much of a PR nightmare if they start rescinding offers. Mm-hmm , I, I haven’t seen too much of that. Um, I have seen the, uh, budgets getting a little bit tighter across big companies. Um, but that’s just them being a little bit conservative, but it’s not like we’re rescinding offers or like
Lee Michael Murphy: until Google does a massive
Sergio Patterson: layoff.
If Google does a massive lay. Then it’s then it’s time to start worrying.
Lee Michael Murphy: we believe not Elon anymore. We believe in Google.
Sergio Patterson: yeah. That’s, you know, the apples, the Googles, like if they’re laying off thousands of people, but like right now, I think startup world’s being hit more. Um, but yeah, I think anytime someone’s thinking about moving companies, Across forever.
You just think about [00:10:00] quality. I think it’s with stock and with when you’re leaving a company, like find a good company that people are good, it’s stable, especially that’s really important right now because you’re gonna be the first to get laid off. If you’re a new hire, they’re gonna lay off you before they lay off person.
Who’s been there for four years. Uh, so for me, I’m gonna, uh, Be a little bit conservative right now. That’s that’s my advice is, uh, you can, you can move around, but make sure you’re, you’re doing it with the right
Lee Michael Murphy: company. Yeah. That’s some great advice, uh, you know, and there’s another, some more data, you know, from the society of human resources, uh, when we’re looking at, you know, what is the amount of jobs available in the people that are, you know, out there looking for work.
It might start to feel right now that there’s just not a lot of jobs available, cuz you know, all this, all these job offers being rescinded and everyone’s tightening their belts, but really the, uh, gap between job openings and available workers remains at 5.5 million in April. Uh, so that means there’s two [00:11:00] jobs for every one unemployed worker.
So those, those are still pretty solid numbers right now. It could be changing, but, uh, these numbers are from April. The main numbers should be coming in pretty soon. Um, but it probably hasn’t changed too drastically from that.
Sergio Patterson: Yeah, that’s right. Like going back to the, the point about the market’s still doing okay.
Still doing good. I think, um, you know, there’s still opportunities out there. People are hiring and if you have a, a job right now at a good, good tech company, like you’re in a pretty good negotiating position right now because companies do not wanna lose people right now in this environment.
Right? Yeah. Like they don’t wanna lose people and they know. You know, you could go from this company to that company and get a 15, 20% raise when maybe, maybe this performance review cycle you’re gonna get offered a 5% raise. Some people are afraid to hear this, but like it’s, it’s, it’s the truth.
I’m seeing it. A lot of people are talking about it. Um, we’ll see what happens. I think over the next couple months, there’s gonna be a lot of movement and. Inflation is impacting us all. I think like my general [00:12:00] piece of advice here is it’s not all doom and gloom. Like there’s still a strong labor market right now, um, competitive market and you could still find some great opportunities and get a pay.
Just be smart about it.
Lee Michael Murphy: Yeah, absolutely. Great advice, man. That was fantastic. So hopefully all this information you listeners, you guys enjoyed it. Uh, but yeah, I thinks brought some great points. Uh, you are still the pretty girl at the ball, you know, so
Sergio Patterson: we’ll stick with that. I I had a, I had a recruiter hit me up, uh, on LinkedIn mm-hmm and it was.
It was one of the contractor one. So they can’t disclose which, which company they’re recruiting for. But they’re like, I’m recruiting for the, the biggest social media company in the world. I’m like, well, I already worked at Facebook and I don’t wanna go back. Sorry.
Lee Michael Murphy: I didn’t
Sergio Patterson: say it with that much.
I was just like, I’ve already worked there. Thanks for reaching out, but I no longer wanna go back. I say that to say that there’s a market out there. People are still recruiting. There’s opportu.
Lee Michael Murphy: Like you said, really look for the quality companies. I mean, right now, if you’re the pretty girl at the ball, the, the guy smoking the cigarette with the leather jacket, with [00:13:00] the, you know, looking all handsome, uh, leaning up against the wall.
Probably not the best bet right now, you know, go for the, go for the, go for the financial guy, you know, the, the solid financial guy in the suit and, you know, he looks stable. So yeah, it goes back to
Sergio Patterson: your, your advice, dude, like. Quality
Lee Michael Murphy: quality. He might be boring guy, but give him a chance.
Sergio Patterson: The companies that can withstand what’s going on in the environment.
That’s that’s where I’m thinking right now. Like, don’t go to some random startup by your friend who thinks he or she has a good idea. Just not right now.
Lee Michael Murphy: Yep. Love it. All right. Thanks listeners. You have been listening to the free retiree show so long for.