Uber announced this morning that it is cutting about 3,300 jobs, roughly 10% of its global workforce. The company is also reducing the number of managers by 20% as it simplifies teams and management layers across the organization.
The interesting part is why. CEO Dara Khosrowshahi told employees that Uber’s business is performing well, but years of growth have created more layers, more coordination and more fragmented ownership. The company says the restructuring will make it simpler and faster while freeing resources to invest in ride-sharing, delivery and its autonomous future.
That distinction matters during a week when I am trying to figure out what is happening in the labor market. Economists tend to treat layoffs as a straightforward signal of economic weakness, and sometimes they are as companies facing falling demand cut costs and workers, but companies also eliminate jobs because organizations become too complex, technology changes, priorities shift, or they decide people and capital can be used more productively elsewhere. Uber looks much more like the latter.
It also helps explain how yesterday’s JOLTS report can show relatively low layoffs across the economy while headlines still bring news of thousands of job cuts. One company restructuring its workforce and the aggregate labor market can be telling us different things.
The more interesting connection may be hiring. Yesterday, JOLTS showed fewer hires and fewer quits, with notable weakness in professional and business services. Losing a job is only half of the labor-market equation. The other half is how easily you can find another one. I’ll get another look at that later this morning when ADP reports August private employment, as economists expect employers to have added only about 47,000 jobs. Uber cutting 3,300 jobs doesn’t tell us where the U.S. labor market is headed, but it is a good example of how companies can be growing, investing and cutting jobs at the same time.
People don’t have to see layoffs everywhere to become more cautious. If losing a job increasingly means a longer or more difficult search for the next one, perceptions of job security can change before the unemployment rate moves dramatically, and that’s why we track these signals at Havas Edge. Employment supports income, but confidence that another paycheck will be there matters for spending too. This week’s labor data is increasingly about both.
🚨 THE JOB MARKET IS COOLING, AND MANUFACTURING IS FLASHING RED
The latest ADP report is giving investors another reason to pay attention.
Private companies added just 38,000 jobs in August, down from 46,000 in July and well below expectations of 47,000.
That makes August the slowest month for private sector job growth since January.
And here’s the part that really stands out:
🏥 Education & health services
🏨 Leisure & hospitality
🏗️ Construction
Those three areas accounted for most of the job gains.
Meanwhile…
🏭 Manufacturing LOST 17,000 jobs.
That’s not exactly what you want to see when the economy is trying to maintain momentum.
The bigger picture?
Hiring is slowing, while businesses are still dealing with elevated costs, tariffs, higher energy prices and economic uncertainty.
And remember this is only the ADP private sector report.
The much more closely watched BLS Nonfarm Payrolls report comes Friday.
That number could determine whether today’s data is simply a soft patch…
or another indication that the labor market is losing steam.
📉 Slowing hiring + weakening manufacturing + elevated inflation = a complicated setup for the Fed.
Friday could be VERY important for markets.
The latest ADP report is giving investors another reason to pay attention.
Private companies added just 38,000 jobs in August, down from 46,000 in July and well below expectations of 47,000.
That makes August the slowest month for private sector job growth since January.
And here’s the part that really stands out:
🏥 Education & health services
🏨 Leisure & hospitality
🏗️ Construction
Those three areas accounted for most of the job gains.
Meanwhile…
🏭 Manufacturing LOST 17,000 jobs.
That’s not exactly what you want to see when the economy is trying to maintain momentum.
The bigger picture?
Hiring is slowing, while businesses are still dealing with elevated costs, tariffs, higher energy prices and economic uncertainty.
And remember this is only the ADP private sector report.
The much more closely watched BLS Nonfarm Payrolls report comes Friday.
That number could determine whether today’s data is simply a soft patch…
or another indication that the labor market is losing steam.
📉 Slowing hiring + weakening manufacturing + elevated inflation = a complicated setup for the Fed.
Friday could be VERY important for markets.